Wednesday, 21 June 2017

Ericsson exploring sale of media, broadcast divisions

Ericsson appointed banks to explore the sale of its two broadcast and media units – divisions once held-up by the company as key components for its future growth, Bloomberg reported.
According to the news website’s sources, Morgan Stanley will investigate a possible sale of Ericsson’s media solutions unit, which covers media processing hardware and technology used to deliver video to a range of devices.
Meanwhile, Goldman Sachs is already on the lookout for a buyer for Ericsson’s broadcast and media services division, which sells a range of creative and delivery services to content providers. The sale will include content and design business RedBee, acquired by Ericsson in 2014.
Ericsson’s media division was one of the areas championed by former CEO Hans Vestberg, who stepped down in July 2016. As late as April 2016, the company said it would intensify efforts to become the market leader in TV and media technology. At the time, Vestberg said Ericsson was already seeing traction in the unit and was the leader in OSS/BSS for IPTV.

However, following the CEO’s departure and subsequent restructuring efforts under new chief Borje Ekholm, the unit fell down the company’s priorities list. At its Q1 results call in April, Ekholm said the media business had made “big significant losses”.
Slimming-downThe disposal of its media business fits with the company’s wider strategy of focusing on its core business  around networks, digital services and IoT, while divesting some of its other divisions.
Ericsson today continued the trimming down of its business with the sale of its power modules business to Flex for an undisclosed sum.

Christian Hedelin, Ericsson’s head of strategy, said the sale is: “in line with our strategy, we are focusing our business on fewer core areas.”

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