Ericsson launches tender offer to buy preferred shares in Brazilian subsidiary
Ericsson has today launched a tender offer to acquire the preferred shares
(non-voting rights) of its listed subsidiary Ericsson S.A. in Brazil. The
offer is made through the wholly owned Ericsson subsidiary Sielte S.A. in
Brazil.
Ericsson at present owns 95% of the voting shares and 51% of the total shares
in Ericsson S.A. If the bid is accepted by all preferred shareholders,
Ericsson's share of Ericsson S.A.'s capital, will increase to about 99%.
The Brazilian telecom market is characterized by high growth and price
pressure due to the lively competition among international telecom suppliers
and operators, something, which has increased during the ongoing
liberalization of the market.
The background to the offer is to give Ericsson S.A. a competitive position to
act fast and with flexibility within a global and seamless Ericsson
organization on the growing globalized market. Ericsson S.A. will remain
listed in Brazil.
The tender offer carries a fixed price of R$ 37.11 per thousand shares. This
price was set representing a premium of 55% over the last closing price of R$
23.90 and a 53% premium over the average price of the last 90 days. The total
number of outstanding preferred shares is 20.2 billion. The total offer
amounts to 749 MR$ equivalent to approximately 640 MUSD.
Shareholders willing to accept the offer should tender their shares at the Sao
Paulo Stock Exchange on September 2, 1998. The offer will remain open until
September 16, 1998. JP Morgan is advising Ericsson in this transaction.
Ericsson has been operating in Brazil for more than 100 years. Net sales in
1997 was 1.25 BUSD. Ericsson has more than 2,200 employees and a good market
position in both the fixed and mobile systems area.
Ericsson's 100,000 employees are active in more than 130 countries. Their
combined expertise in fixed and mobile networks, mobile phones and infocom
systems makes Ericsson a world-leading supplier in telecommunications.
FOR FURTHER INFORMATION, PLEASE CONTACT
Pia Gideon, Manager, External Relations
Phone: +46 8 719 2864 or +46 70 519 2864
E-mail: pia.gideon@lme.ericsson.se
Johan Fant, Senior Vice President, Corporate Financial Control
Phone: +46 8 719 3707 or +46 70 540 4011
E-mail: johan.fant@lme.ericsson.se
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