Ericsson, Sony mull tie-up

April 19, 2001
Web posted at: 1332 GMT

LONDON (CNN) -- Sweden's Ericsson and Japanese electronics titan Sony said on Thursday they are in talks on teaming up in their handset businesses.

Ericsson, the world's No. 1 mobile network equipment maker, and Sony, the world's second-biggest electronics maker, both said that no details have been decided.

The companies have reached a basic agreement to form a joint venture in Britain and will announce the deal next week, Japanese broadcaster NHK reported earlier.

Under the deal, the companies would spin off and integrate their current mobile phone businesses, Japan's Nihon Keizai Shimbun daily newspaper reported in its Thursday evening edition. It was undecided if the venture would sell phones under a single brand, it said.

Shares in Ericsson soared 6.3 percent in Stockholm afternoon trade while Sony shares ended up 3.2 percent in Tokyo.

Ericsson said in January it would fully outsource its handset production, with the vast majority to be taken over by Singapore-based Flextronics International (FLEX: Research, Estimates).

The struggling Swedish mobile phone and network equipment maker warned last month it would post a loss of up to 5 billion crowns, or $510 million, in the first quarter of 2001. The company is due to report first-quarter results on Friday.

The company has also announced thousands of layoffs and is expected to cut more.

--from staff and wire reports

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Ericsson
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