Ericsson raises stake in Korea JV

Reuters News
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Posted: Mar 22, 2012 9:19 AM

STOCKHOLM (Reuters) - Ericsson <ERICb.ST>, the world's top mobile network equipment maker, has increased its stake in joint venture LG-Ericsson as it looks to consolidate its position in the fast-growing South Korean market.

Ericsson (ERICb.ST) bought bankrupt Nortel Networks' controlling stake in the venture with LG Electronics <066570.KS> for $242 million in 2010 to gain a foothold in Korea.

The Swedish company said on Thursday it now held a 75 percent stake in LG Ericsson, up from the 50 percent plus one share it had previously.

LG-Ericsson -- a supplier to major Korean telecom operators such as KT Corp <030200.KS>, LG Telecom and SK Telecom <017670.KS> -- was set up in 2005.

Cash-rich Ericsson, which last year sold its stake in its mobile phone joint venture Sony Ericsson to Sony <6758.T> for just over 1 billion euros ($1.32 billion), gave no financial details of the deal.

Ericsson has another joint venture company, struggling chip maker ST-Ericsson.

Analysts believe Ericsson will probably sell its stake in ST-Ericsson after the chip-maker returns to profitability, although Ericsson has said it is a long-term, strategic holding.

($1=0.7582 euros)

(Editing by Mike Nesbit)