EUR300 million to be pumped into SonyEricsson venture

29 Jan 2003

Sony [NYSE:SNE] and Ericsson [Stockholm: ERICbX3] have announced plans to each invest a further EUR150 million into their joint venture, SonyEricsson Mobile Communications, by the end of March 2003, in a bid to boost the loss making company’s finances. SonyEricsson, which was launched in October 2001 and is now the world’s fifth largest handset manufacturer, has not yet posted a profit. In the fourth quarter of 2002, however, it claimed to have narrowed its net loss to EUR69 million from EUR139 million twelve months earlier, while sales rose 18% to EUR1.24 billion and handset shipments rose 4% to 7.1 million units. Sony said it expects the unit to reach profitability in 2003, underlining its continuing commitment to the venture, although there has been persistent speculation that Ericsson may sell its 50% share in the venture if it does not break even this year. The joint venture agreement calls for Sony and Ericsson to invest a further EUR350 million each by the end of October this year, in addition to the EUR300 million to be injected before the end of March, although Ericsson, which has witnessed a downturn in its infrastructure business in recent months, has suggested that this may not be necessary.

Sweden