Sale of Ericsson unit to Infineon approved

All regulatory hurdles for the sale of Ericsson Microelectronics AB to Infineon Technologies AG have been cleared and the deal is set to close next month, L.M. Ericsson Telephone Co. announced Wednesday.

The all-stock deal, announced in June and valued at the time at €400 million (US$380 million), is part of Ericsson's move to focus on making and selling systems and services to telecommunication operators, its core business, the Stockholm-based company has said. Ericsson Microelectronics makes chipsets that support the Bluetooth short-range radio technology, components for mobile phones, as well as parts used in mobile phone base stations, among other products. These are new areas for Munich-based Infineon, which will become a main supplier to Ericsson, the two companies said in June.

Ericsson has been hit hard by the economic slowdown and is restructuring to become profitable again sometime in 2003. Ericsson, headquartered in Stockholm, plans to issue new shares this month to raise about 30 billion kronor (US$3.2 billion) to pay off debt and finance its restructuring programs.

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