Ericsson Seeks Bids for $2 Billion Sale of Iconectiv
(Bloomberg) -- Ericsson AB, the communications equipment supplier, has started a sale process for Iconectiv, its U.S. call routing unit, people familiar with the matter said.
The telecom infrastructure company is working with an adviser on the potential divestment, the people said, asking not to be identified because the information is private. Bidders include several private equity firms, the people said. The unit could fetch about $1.5 billion to $2 billion, one of them said.
Activist investor Cevian Capital, which is Ericsson’s largest shareholder, has demanded several strategic moves including a full divestment of the business.
No final decisions have been made, and Ericsson could decide to keep the unit, the people said. A representative for Ericsson declined to comment.
Under current chief executive officer Borje Ekholm’s tenure, Ericsson has focused on its core radio-equipment business, and improved profitability by exiting loss-making contracts and divesting businesses that were added in earlier attempts to diversify.
Iconectiv develops solutions that enable operators to connect networks. Its services are used by more than 1,200 customers including service providers, regulators and enterprises worldwide, according to its website. The company also provides numbering solutions, which allows users keep their numbers when switching providers, and works with clients including the U.S. Federal Communications Commission.
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