Ericsson has agreed to sell its defence business, Ericsson Microwave Systems (EMW), and its 40 percent holding in Saab Ericsson Space to Saab, subject to approvals from relevant competition and defence authorities. Under the agreement Ericsson will retain the National Security and Public Safety business and parts of the Power Systems business, with the retained units employing around 300 individuals.

The purchase price is SEK 3.8 B in cash, with the transaction expected to be completed in September 2006. The sell-off also involves the transfer of approximately 1250 employees.

The agreement includes Ericsson’s 20 percent ownership in the IG JAS consortia, Ericsson’s shares in the joint ventures Thales EAW Systems and Ericsson Saab Surveillance Systems AB. The Ericsson defence business that Saab is acquiring had sales of approximately SEK 2 B in 2005 with good profitability.

Ericsson Microwave Systems is a leading provider of radar, command and control systems for defence applications. The company’s comprehensive product portfolio includes the weapon locating system Arthur, the air surveillance system Giraffe and the operational airborne surveillance system Erieye.

Carl-Henric Svanberg, president and CEO, Ericsson, commented: “We are very pleased with this agreement since it gives EMW and its employees good possibilities to expand growth through Saab’s strong market presence. Also, the EMW employees will now belong to a company with this area as a core business.”