STMicroelectronics to Exit Joint Venture With Ericsson
STMicroelectronics is exiting ST-Ericsson, its chip-making joint venture with Swedish telecom equipment supplier Ericsson , both companies announced today. STMicroelectronics said "the disengagement process has started" and the transition is expected to end during the third quarter of 2013.
ST-Ericsson is loss-making, The Wall Street Journal reports, and STMicroelectronics' exit from it is part of a broader strategy to become a leaner and more profitable firm. The company has posted a net loss in its last four quarters, the most recent of which saw a shortfall of 382 million euros ($494 million).
Ericsson, meanwhile, said it "will not speculate on the possible outcomes, timelines, and future ownership structures of ST-Ericsson." The company said it would work with STMicroelectronics to "find a suitable strategic solution" for the joint venture. STMicroelectronics said it would "continue to support ST-Ericsson as their supply-chain partner, advanced process-technology partner and application-processor IP provider."
linkST-Ericsson was established in February 2009 and generated sales of $1.7 billion in 2011.
The article STMicroelectronics to Exit Joint Venture With Ericsson originally appeared on Fool.com.Eric Volkman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.