Sony and Ericsson to merge mobile phone operations

Sony and Ericsson say they've agreed terms to merge their mobile phone businesses.

The two companies are set to come together on October 1, subject to approval from both company boards.

The global management team of Sony Ericsson Mobile Communications will be based in London.

The joint venture company will have an initial workforce of 3,500 employees.

Sony and Ericsson hope the move will push their lossmaking handset units back into the black and enable them to challenge market leaders Nokia and Motorola.

The joint venture will be headed by Sony vice-president Katsumi Ihara as president, with Ericsson's former head of consumer products Jan Wareby as executive vice-president.

Ericsson chief executive Kurt Hellstron will chair the eight-member board, on which each partner will have four members.