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Sony-Ericsson merger expected soon 
Monday, August 27 2001
by Matthew Clark


The move announced by Sony and Ericsson in April to merge the mobile divisions of
the two companies is understood to be close to completion.



According to a report from Reuters, the two companies are in final talks over a
merger of their mobile phone units, and sources close to the joint venture say a
deal was set to be signed on Monday. 



The deal was originally announced on 24 April, 2001 and at the time executives in
the two corporations said they expected the new company, called Sony Ericsson
Mobile Communications, to begin operating by 01 October. 



Most of the details of the arrangement had been made clear in the April
memorandum of understanding. Katsumi Ihara, currently corporate executive vice
president of Sony, has been appointed president of the new venture and head of
Ericsson's consumer division, Jan Wareby, has been appointed executive vice
president of the venture. 



The new company is expected to be based in London, expects its first products to
be launched in 2002 and will be equally owned by the two companies. 



Yet many aspects of the arrangement remain uncertain and any forthcoming
announcement from the companies is expected to clarify several key issues
including ultimate control of the joint venture and control of marketing and
branding. 



The combined sales of the mobile phone divisions for the two corporations were
USD7.2 billion in 2000, representing 50 million handsets. 



Ericsson and Sony's decision to merge their mobile divisions came as no great
shock to the industry. Both companies had loss-making handset operations and
faced fierce competition from a number of companies in the industry, most notably
Nokia in Europe. 



"We'll need a deeper understanding of consumer electronics, including audio and
video, design, games and music," Kurt Hellstrom, chief executive of Ericsson,
said earlier this year. Hellstrom is expected to become chairman of the board of
Sony Ericsson Mobile Communications. He added, "I don't think we could have
found a better partner than Sony."



In fact the new company is expected to combine the remarkable consumer
electronics experience and ability Sony has demonstrated over the last few
decades with Ericsson's longstanding experience as a major wireless and telecoms
company around the world. 



Ericsson employs around 2,000 in Ireland and can be found at href="http://www.ericsson.com">http://www.ericsson.com