Having spent six years struggling to get the old Datasaab AB into shape, and to pursue the elusive benefits of the convergence of computers and telecommunications, L M Ericsson AB has thrown in the towel and decided to get out of the computer business. The company announced yesterday that it had reached agreement with Nokia […]
Having spent six years struggling to get the old Datasaab AB into shape, and to pursue the elusive benefits of the convergence of computers and telecommunications, L M Ericsson AB has thrown in the towel and decided to get out of the computer business. The company announced yesterday that it had reached agreement with Nokia Oy of Helsinki, Finland for the sale of the data systems division of Ericsson Information Systems, which represents substantially all Ericsson’s computer interests. No indication of the price to be paid was given, but Ericsson will retain a 20% interest in the new Nokia Data. The Ericsson businesses employ 5,000 people and its operations cover the development, manufacture and marketing of general purpose display terminals, personal computers, minicomputers, and small business and banking systems. Included in the purchase are factories in Sweden, and the marketing companies in the UK, West Germany, France, Sweden, Denmark, Switzerland, the Netherlands and Spain. Nokia will also acquire Ericsson associate Oy Dava Ab of Finland. Nokia is not acquiring any operations in North America or in Norway, Belgium, Ireland, Austria, Italy, Australia or New Zealand, and related activities in these countries will continue to be handled by Ericsson’s sales organisations. Ericsson says it is divesting the business, which has annual sales estimated at some $630m, to concentrate on the areas where it is strongest, and that the rapid acceptance of communications standards means that Ericsson does not need a captive computer business. Ericsson acquired Datasaab AB from Saab-Scania AB and the Swedish government in 1981. Datasaab was itself created by a merger of the Saab computer subsidiary with the one-time Swedish subsidiary of ITT, Stansaab AB, which brought the Alfaskop display terminals to the party. The business overall has almost certainly never turned a profit in the last 15 years. The deal still needs regulatory approval from both Sweden and Finland.