Sony has just confirmed that it has completed the deal to buy partner Ericsson’s joint venture Sony Ericsson mobile venture, according to the confirmation posted to Reuters in a press release. The company Ericsson has completed the divestment of its 50 percent stake in Sony Ericsson Mobile Communications AB, which even includes the broad IP cross-licensing agreement which was jointly announced by Sony Corporation and Ericsson back on October 27, 2011.
The company will now be named as Mobile Communications and owned wholly by the Japanese entertainment giant. Ericsson’s gain on the transaction will be around SEK 7.5 billion and will be reported in the quarter first result dates April 25, 2012 as too be called as ‘Other operating income’ in the income statement. The agreed cash consideration for the transaction is about EUR 1.05 billion.
Sony last quarter earnings were miserable – the company posted an operating loss of $1.2 billion and net loss of $2 billion on revenue of $23.37 billion. Sales were 1,822.9 billion yen (USD $23,370 million), a decrease of 17.4% compared to the same quarter of the previous fiscal year (YOY) primarily due to the impact of the floods in Thailand which began in October 2011, deterioration in market conditions in developed countries, and unfavorable foreign exchange rates. The $23.37 billion in revenue represented a 17.4 percent decrease year over year.
The company which is facing its fourth year of losses, Japanese electronics giant Sony recently announced that it has named former president of its Consumer Products and Services Group Kazuo Hirai as president and CEO, replacing Howard Stringer. Even further, Standard and Poor’s downgrade Sony’s long-term debt rating to BBB+, citing a warning that it may further drop the ratings to further extent unless and until if the Japanese consumer electronics giant shows it can achieve relevant and significant turnaround in profitability.