ST-Ericsson, the joint venture between chip maker STMicroelectronics and communications giant Ericsson, announced on Tuesday a definitive agreement to sell the assets and intellectual property rights (IPR) of its Global Navigation Satellite System (GNSS) business to an unnamed semiconductor company. Later in the day an Intel Corp. spokesperson confirmed it was buying the unit.
The move represents another step in the execution of Ericsson’s and ST’s plan announced earlier this year to dissolve the joint venture. In addition to the assets and IPR associated with this business, a team of 130 industry veterans are anticipated to join the buyer at closing of the transaction.
“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,” said Carlo Ferro, president and CEO of ST-Ericsson, in a release. “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.”
The closing of the transaction is subject to regulatory approvals and standard conditions and is expected to be completed in August, 2013. 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.
