Press release
The European Commission has approved under the EU Merger Regulation the creation of a joint venture between EMP, the wireless platform business of Ericsson of Sweden, and ST-NXP, the wireless semiconductors business of STMicroelectronics of the Netherlands. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Ericsson is active in telecommunication products, ranging from networks and multimedia solutions to professional services and other communication products such as mobile phones. It is the ultimate parent company of Ericsson Mobile Platforms (EMP), a business unit which operates as a designer of wireless platforms. Wireless platforms combine the hardware components and the key software which allow a wireless handset to operate.
STMicroelectronics is active in the supply of semiconductors, ranging from single components to complex integrated systems and complete electronic platform solutions. It is the ultimate parent company of ST-NXP, a company active in the area of semiconductors for mobile telecommunications.
The joint venture would be active worldwide in the supply of wireless platforms for mobile handsets as well as the supply of semiconductors for mobile telecommunications. The joint venture would integrate all of EMP's activities, which consist of designing wireless platforms for the cutting-edge 3G mobile handsets (HSPA technology), with the activities of ST-NXP which focus on less technologically-advanced 2G handsets and, to a limited extent, the mature 3G (WCDMA release 99) handsets. ST-NXP is already the preferred supplier of core semiconductors sold with EMP's HSPA platforms.
The Commission's market investigation revealed that the creation of the joint venture would not give rise to competition concerns in the markets for wireless platforms and wireless semiconductors.
The Commission's investigation found no horizontal concerns in the overall market for wireless platforms and confirmed that horizontal overlaps between the activities of EMP and ST-NXP are marginal. As regards wireless handset semiconductors, the proposed transaction would not raise any horizontal competition concerns since EMP is not active in this market.
The parties are active on vertically-related markets. The joint venture would lead to the creation of an integrated platform supplier, by combining the semiconductor activities of ST-NXP with the platform design activities of EMP. However, the Commission's investigation did not reveal any competition concerns in this respect.
The Commission found that there would be no risk that the joint venture would restrict sales of wireless semiconductors supplied by ST-NXP for wireless platforms, as other companies active on the merchant market for platforms are vertically-integrated and do not source semiconductors from ST-NXP. Nor would there be a risk that the joint venture would restrict the access to its wireless semiconductors to the detriment of handset manufacturers competing with SonyEricsson as the Commission's market investigation confirmed that handset manufacturers have several alternative suppliers for the wireless semiconductors supplied by ST-NXP.
Finally, the Commission found that there would be no risk that the joint venture would restrict the access of current ST-NXP competitors to the market for the supply of core wireless semiconductors to wireless handset manufacturers. Although ST-NXP competitors may lose sales of wireless semiconductors previously supplied through EMP, this would not raise competition concerns as EMP only accounts for a small share of the demand for wireless semiconductors. Furthermore, ST-NXP was already the preferred supplier of EMP before the proposed transaction.
