STMicro puts $1.2 bln into Ericsson venture

LONDON Wed Aug 20, 2008 7:37am EDT

LONDON Aug 20 (Reuters) - STMicroelectronics (STM.PA) will contribute $1.2 billion in assets to a joint venture announced on Wednesday with Ericsson (ERICb.ST).

Earlier, the two firms said they had agreed to combine their wireless chip and software businesses to create a joint venture that will supply four of the world's top five cellphone makers.

A presentation document by the firms included a slide with a diagram of the financial structure of the deal. The diagram showed STMicro would put "$1.2 billion net assets, cash/debt free," into the venture. It also showed a cash payment back to STMicro of $700 million from the venture.

Ericsson, as previously announced, is making a $1.1 billion cash payment to fund the venture, which will have $400 million of cash.

(Reporting by Georgina Prodhan in London via Stockholm newsroom)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.