In Sony Ericsson, a 50-50 joint venture created in 2001 between Sony and Ericsson, could now become a company that is wholly owned by Sony. By buying out Ericssons stake Sony aims to integrate its smartphone operation with its businesses in tablets, hand-held game machines, and personal computers to save on costs and better synchronize development of mobile devices.
The move could help Sony recoup ground in the battle against Apple Inc and Samsung Electronics, where it has been hampered by its disparate offerings of mobile gadgets and online content. Currently Sony Ericsson enjoys the status of worlds sixth-largest cellphone manufacturer.
According to sources, Sony and Telefon AB LM Ericsson have been talking for weeks about the future of the 50:50 joint venture because the companies must decide this month whether to renew their 10-year-old pact. Ericsson and Sony declined to comment on the talks.
However, Sony's shareholders appear wary of any deal that would burden the company's finances. Its stock was down 3.3 percent at 1,422 yen on Friday afternoon, compared with a 1.4 percent gain in the benchmark Nikkei 225 index.
It is still unclear, what amount Sony would actually pay Ericsson. The transaction is complex because it could involve Ericsson's mobile-technology patent portfolio. But analysts estimated that Ericsson's stake in the venture could be valued between 1 billion and 1.25 billion euros, or roughly $1.3 billion to $1.7 billion. Negotiations between Sony and Ericsson to unwind the venture have broken down in the past as the two sides struggled to reach an agreement over price
A possible deal between Sony and Ericsson would be the latest transaction to shake up the mobile-handset industry. Google Inc. in August struck a deal to buy Motorola Mobility Holdings Inc.'s cellphone business for $12.5 billion, lured by Motorola's patents.
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