Ericsson agrees to sell its defense business to Saab

[Nikos Kartalis]

Ericsson Microwave Systems (EMW) is a leading provider of radar, command and control systems for defense applications. In the product portfolio are e.g. the weapon locating system Arthur, the air surveillance system Giraffe and the operational airborne surveillance system Erieye.

The Ericsson defense business, that Saab is acquiring, had sales of approximately SEK 2 b. in 2005 with good profitability. In addition to the National Security and Public Safety business, Ericsson will retain parts of the Power Systems business. The retained units employ around 300 individuals.

Saab is one of the world's leading high-tech companies, with its main operations in defense, aviation, space and civil security. In 2005, total annual sales amounted to SEK 19 b.

Carl-Henric Svanberg, President and CEO, Ericsson, says: "We are very pleased with this agreement since it gives EMW and its employees good possibilities to expand growth through Saab's strong market presence. Also, the EMW employees will now belong to a company with this area as a core business."

A long period of co-operation and a strong future combination
Saab and EMW have co-operated closely for a number of years. The co-operation has included Erieye and JAS 39 Gripen. The integration of EMW's advanced radar and sensor systems creates new and long-term business opportunities for Saab.

Svanberg says: "The advanced radar development focusing on defense customers has today less synergies with Ericsson's core business. As a result of the agreement, we will strengthen our focus on telecommunications. We are also very confident about the future prospects for the National Security and Public Safety area, which will remain within Ericsson, where the development has just recently started to take off."

Åke Svensson, CEO, Saab Group, says: "We are delighted to welcome EMW's very talented employees to Saab. EMW makes a perfect fit into our business and we foresee good growth opportunities going forward for the strong combined product offering."

Furthermore, Ericsson and Saab intend to evaluate opportunities for a future co-operation between the two companies, within the area of National Security and Public Safety where the companies' relative strengths are complementary.