ST-Ericsson, a joint venture of STMicroelectronics and Ericsson, has sold its mobile connectivity GNSS business to Intel.
ST-Ericsson, which focuses on mobile and wireless chips, announced the sale on Tuesday without naming the buyer. An Intel spokesman later said the U.S. chipmaker bought the assets.
According to ST-Ericsson, the sale “represents another step in the execution of Ericsson’s and ST’s announcement of March 18, 2013,” when the company announced it was winding down the joint venture. Ericsson will assume 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China. ST will assume 950 employees, primarily in France and in Italy.
In addition to the assets and intellectual property rights associated with this business, 130 employees in Daventry, UK, Bangalore, India, and Singapore are anticipated to join Intel at closing of the transaction, and will be added to Intel’s already-existing GPS assets.
The closing of the transaction is subject to regulatory approvals and standard conditions and is expected to be completed in August. ST-Ericsson estimates the proceeds from the sale, combined with the avoidance of employee restructuring charges and other related restructuring costs, will reduce the joint venture’s cash needs by approximately $90 million.
“Today’s transaction validates the leading innovation developed by ST-Ericsson in mobile navigation systems and marks a further important step towards the execution of our shareholders’ decision to exit from ST-Ericsson” commented Carlo Ferro, President and CEO of ST-Ericsson. “I am pleased that this organization will continue to develop leading-edge technologies and delighted that the team found a new home at a leading player in the semiconductor industry.”