My coverage over the last two weeks or so is beginning to paint a broad picture of a struggling — or at least a changing — market, characterized by the unloading of assets and workers. The latest news, this time from Swedish vendor Ericsson, doesn’t appear to be much different. As part of larger cost-cutting efforts, the company has agreed to sell U.S.-based subsidiary iconectiv to Koch Equity Development for $1 billion.
Ericsson acquired iconectiv in 2012 as part of its acquisition of American telecommunication research and development company Telcordia. The subsidiary is currently part of Ericsson’s Segment Enterprise unit and in 2023, it contributed roughly SEK1 billion to the company’s net income. According to a press statement, iconectiv serves more than 5,000 customers across various sectors, providing number portability solutions, core network and operations management and numbering and data exchange services.
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“The divestment will allow iconectiv to continue its growth trajectory under the new ownership of Koch Equity Development LLC,” Ericsson stated. The sale is expected to close in H1 2025. Ericsson also said it anticipates booking a one-off EBIT gain of around SEK8.8 billion and that profits from the sale will go towards the settlements of taxes, transaction expenses and other obligations.