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Ericsson intends to make a cash offer for its listed Italian subsidiary Ericsson S.p.A.

Ericsson today announced its intention to make a public cash offer for the 28.81 per cent of the shares in its Italian subsidiary Ericsson S.p.A. not already owned by Ericsson. Ericsson presently holds 71.19 per cent of the shares in Ericsson S.p.A.

Press release  |  Apr 26, 2004 05:29 (GMT +00:00)

Ericsson will, through a newly formed Italian company, offer EUR 32.00 in cash for each Ericsson S.p.A. share. The offer value of the shares not already owned by Ericsson (28.81 per cent) is EUR 237.3 million. The offer price represents a premium of 19.2 per cent over the reference price of Ericsson S.p.A. shares on April 23, 2004 and a premium of 25.4 per cent over the average Ericsson S.p.A. share price during the last three months. Ericsson S.p.A. is listed on the Milan Stock Exchange (Mercato Telematico Azionario in Milan).

The reason for the offer is to continue to simplify the Ericsson Group structure and to reduce the number of listed subsidiaries. This was the rational behind the offers for the minority shares in Ericsson's listed subsidiaries in Brazil in 1998 and Mexico in 1995. Ericsson S.p.A. is the only remaining listed subsidiary within the Ericsson Group. It is Ericsson's aim to concentrate trading in Ericsson shares to a limited number of key markets, i.e. Stockholm, London and NASDAQ in the US.

Ericsson has successfully operated in Italy for 86 years. The Italian market is important to Ericsson. Ericsson will continue to show strong commitment to the Italian market, one of the early adopters of cutting-edge broadband multi-media technologies including EDGE and WCDMA.

The offer is conditional upon the offer being accepted to such an extent that Ericsson becomes the owner of more than 90 per cent of the shares in Ericsson S.p.A. However, Ericsson reserves the right to implement the offer at a lower level of acceptance. The offer is also subject to the absence of certain force majeure events. Further information regarding the offer is included in the communication that has been distributed on the Italian market and is also available on Ericsson's web site, Further information will also be available in the offer document, which is expected to be published in the second half of May. The acceptance period for the offer will start a few days after the offer document has been published. ABN AMRO is financial advisor to Ericsson in relation to the offer.

Ericsson S.p.A.'s net consolidated sales in 2003 were EUR 1,074.6 million and the consolidated EBIT was EUR 52.0 million. Ericsson S.p.A. has today more than 2,200 employees in Italy and is the leading vendor of telecommunications equipment both for mobile and fixed telephony in the Italian market.

Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world.

Pia Gideon, Vice President, External and Market Communications
Phone: +46 705 198 903
Ericsson press phone: +46 8 719 6992

├ůse Lindskog, Head of Media Relations, Communications
Phone: +46 730 244 872
Ericsson press phone: +46 8 719 6992

Investors and analysts
Gary Pinkham, Head of Investor Relations, Communications
Phone: +46 8 719 0000

This press release may not be published or otherwise distributed in or into the United States of America (including its territories and possessions, every State of the United States and the District of Columbia), Canada, Japan or Australia and it does not constitute an offer or an extension of the offer referred to in this press release into any of these countries.

The offer for Ericsson S.p.A. shares will not be made directly or indirectly in (or by use of the mails of, or by any means or instrumentality of interstate of foreign commerce of, or any facilities of a national securities exchange of) the United States of America or Canada, Japan, Australia or any other country in which it may not be made absent authorisation of the relevant authorities. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone and the Internet.

The full terms and conditions of the offer referred to in this press release will be set out in the prospectus detailing the offer to be published after the approval by CONSOB.

The offer referred to in this press release will be directed only at persons outside the United Kingdom or having professional experience in matters relating to investments and will be available only to such persons. Persons in the United Kingdom who do not have professional experience in matters relating to investments should not rely or act on any information included in this press release.