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Wavecom acquires Sony Ericsson’s M2M business

ISSY-LES-MOULINEAUX, France—Wavecom announced plans to acquire Sony Ericsson Mobile Communications L.P.’s machine-to-machine business, which specializes in automotive and industrial wireless solutions, in a deal valued at a maximum of $39.5 million. The deal is expected to close near the end of this month.

Wavecom’s CEO Ron Black said the deal marked the first consolidation of two large companies in the wireless M2M space and should accelerate the adoption of M2M industry standards that would grow the market.

The deal gives Wavecom a foot in North American markets for automotive and fleet management; it already serves a diverse automotive customer base in Europe. Wavecom’s Black said his company would integrate Sony Ericsson’s M2Mpower software suite into Wavecom’s Open AT software suite.

Wavecom said it expects that 90 Sony Ericsson employees will join Wavecom after the purchase, including Anders Franzen, the head of Sony Ericsson’s M2M unit. Franzen will become a vice president and chief operations officer, responsible for research and development, manufacturing, supply chain, program management and quality.

Sony Ericsson’s M2M unit had 2005 revenues of about $79 million, but operated at a loss. Thus, Wavecom’s acquisition of the business could put pressure on profits, at least in the short term. Wavecom plans to announce its first-quarter earnings on April 27.

Sony Ericsson Mobile Communications is based in Sweden and Wavecom is based in France. Sony Ericsson’s M2M Communications Business Unit is located in Research Triangle Park, N.C., and has offices in Europe and Asia.

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