Ericsson Makes Cash Offer for Subsidiary.LM Ericsson Telefon AB is making a cash offer to buy back the remaining shares of its Italian subsidiary it does not already own. Under terms of the deal, Ericsson is offering via its newly formed Italian company NewCo SpA, 32 euros ($37.98) for each share in Ericsson SpA it does not already own.Ericsson currently holds 71.19% of the shares in Ericsson SpA, and the offer for the remaining 28.81% stake is valued at 237.3m euros ($281.65). Ericsson SpA is the sole remaining listed subsidiary within the Ericsson Group, and the acquisition is intended to simplify the Ericsson Group structure. It follows similar offers for minority stakes in Ericsson's Brazilian and Mexican operations in 1998 and 1995 respectively. Ericsson SpA is listed on the Milan Stock Exchange Milan Stock Exchange The largest regional stock exchange in Italy, facilitating more than 90% of the country's trading volume. , and employs roughly 2,200 staff. It provides telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment for mobile and fixed-line telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. in the Italian market. Last year, it reported a consolidated EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). of 52m euros ($61.7m) on sales of 1.07bn euros ($1.27bn). The Stockholm, Sweden-based company intends to delist delist To drop a security from trading on an organized exchange. Delisting may occur for a number of reasons including failure to meet an exchange's standards or placement of a new listing on another exchange. Compare list. its subsidiary shares from the Milan stock exchange and instead concentrate trading in Ericsson shares in Stockholm, London, and in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The move to simplify the structure of the Ericsson Group, and to reduce the number of listed subsidiaries, follows the reforming of its controversial voting structure to allow foreign shareholders a greater say in the company, in February. The deal is expected to be approved by the end of June. |
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