Wavecom SA, a wireless technology developer stated its intention to acquire Sony Ericsson’s machine-to-machine (M2M) Communications Business Unit. The Unit is a solution provider for automotive and industrial companies, offering them wireless solutions.
Wavecom will give Sony as much as 32.5m euros ($39.5 million) in cash. The total amount will depend on whether Wavecom meets performance milestones during the next six to nine months. Solution provider Sony Ericsson will give Wavecom a business unit including all products in the new GX64 GSM/GPRS family, along with the GX47/48 GSM GPRS and the CM42/52 CDMA1xRTT product families. Wavecom will also acquire the company’s international assets. This transaction excludes anything related to Sony’s mobile phones, accessories or PC cards.
Wavecom CEO Ron Black sees this move as a blending of the two main forces in the wireless M2M market. Wavecom creates wireless plug-in models modeled after chipsets it designsand combined with the Open AT software platform. This platform helps develop applications in the GPS, telematics, telemetry, real-time asset tracking and security applications. Its competitors include major company Siemens AG and Telit Communications.
A Wavecom spokesperson stated that there is not much overlap between solution provider Sony Ericsson, headquartered in North Carolina and Wavecom. Sony Ericsson’s major market is in the automotive and fleet management areas, which can hopefully complement similar automotive customers Wavecom, based in France has in Europe. Wavecom is set to get 60 research and development staff and 30 salespeople as part of the recent acquisition.
Both Wavecom and Sony Ericsson experts admit the new acquisition is going to be difficult, as both companies have experienced losses in revenue over the past few years, and there will be pressure for short-term profit. The deal should be completed by the end of March.
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