Wavecom Buys Sony Ericsson Unit

Wireless component specialist Wavecom purchases Sony Ericsson's machine-to-machine communications business for roughly $39 million, while Ericsson tries to outbid Lucent for Ethernet infrastructure vendor Riverstone.

Wireless handset maker Sony Ericsson announced that it has sold its M2M (machine-to-machine) communications business to French wireless provider Wavecom in a deal valued at roughly $39 million.

Under the sales agreement signed by the firms, Wavecom, which markets embedded wireless communications technologies for use in automotive, industrial and mobile applications, will pay all cash in the deal for certain assets of the M2M business unit.

The deal is slated to close sometime before the end of March.

M2M is technology used to allow for communications between different types of computers and other devices. A common example of an application of the technology is its use in road monitoring equipment in many major U.S. cities in the name of studying traffic patterns.

Potential applications emerging for wireless M2M tools include inclusion in different types of industrial machines for the purpose of informing maintenance workers when something is about to break, or is overdue for maintenance.

Wavecom said that the assets it purchased from Sony Ericsson include the business units new GX64 GSM/GPRS wireless radio line, as well as its older GX47/48 GSM/GPRS and CM42/52 CDMA/1xRTT products.

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The company was careful to point out that the transaction does not include any assets or activities related to Sony Ericssons mobile phones business.

Wavecom executives said that the merger of the two businesses greatly expands the companys size and global footprint. Specifically, the firm said that the deal would give it a much larger presence in North America.

"This event marks the first consolidation of two major players in the wireless M2M space," Ron Black, CEO at Wavecom, said in a statement.

"It will strengthen the industry and should accelerate the adoption of industry standards which are needed to stimulate overall market growth."

Black indicated that after closing the acquisition, Wavecom also plans to fold Sony Ericssons M2Mpower software into its Open AT package, which is used in M2M systems for automotive and industrial wireless applications.

The executive said that his company will also benefit from Sony Ericssons hardware customization capabilities.

Sony Ericssons M2M Communication Business Unit is headquartered in Research Triangle Park, N.C. and will remain there with over 90 of its employees joining Wavecom, the companies said.

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In related news, telecommunications giant Ericsson, which owns a 50 percent stake in the wireless company, submitted a $178 million offer to purchase most of the assets of Ethernet infrastructure providers Riverstone.

Riverstone, which filed for Chapter 11 bankruptcy protection last year, has been actively seeking a buyer and signed a preliminary sales agreement with Lucent Technologies in February valued at just over $170 million. Riverstone retained the right to receive additional bids up until last week, when Ericsson entered the bidding war.

Riverstone executives are expected to make a final decision in selling off their remaining assets sometime this week.

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