ST-Ericsson, a joint venture between Ericsson and STMicroelectronics, announced on Wednesday that it has sold its global positioning system (GPS) mobile business to Intel. This is also the first M & A transaction completed by Brian Krzanich as Intel CEO.
Neither Intel nor ST Ericsson disclosed the specific amount of this transaction, but ST Ericsson said that through this transaction, plus the exemption of employee restructuring expenses and other related restructuring expenses, the company can reduce the cash required by about 90 million US dollars . STMicroelectronics and Ericsson announced in March that the official dissolution of STMicroelectronics was due to the fierce competition in the chip market and the sharp decline in orders from its largest customer Nokia. The reasons for the dissolution of STMicroelectronics and Ericsson are very clear: In the first quarter of 2013, STMicroelectronics Ericsson's operating losses reached US $ 158 million and revenue was US $ 256 million. STMicroelectronics said last month that during the transition period, the company is expected to spend $ 450 million.
Intel spokesman Chris Kraeuter (Chris Kraeuter) said that after Intel acquired STMicroelectronics Ericsson ’s GPS mobile business, its intellectual property rights and engineers in the global positioning system will have a positive impact on Intel ’s own business.
Through the acquisition of STMicroelectronics ’global positioning system mobile business, Intel can enrich its mobile chip business. This transaction will also allow Intel to gain a certain degree of competitiveness in its confrontation with Qualcomm. At present, Qualcomm already has a very powerful GPS asset.
Although Intel dominates the global PC and server processor market, it has little to do in the mobile chip market.
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