Sony, Ericsson to Incorporate Mobile Phone Businesses

Wireless telephone maker Ericsson (ERICY Quote) and electronics company Sony (SNE Quote) confirmed that they plan to create a new venture incorporating the operations of both companies' mobile phone businesses.

The new company will be called Sony Ericsson Mobile Communications, with Ericsson and Sony each owning an equal stake in the company. The companies expect the venture, which will be responsible for marketing, sales, distribution and customer service, to begin operations in October.

Rumors surrounding the formation of the venture have been circulating for several days. The new company will be based in London and will be headed by Katsumi Ihara, corporate executive vice president of Sony. Kurt Hellstrom, the president and chief executive of Ericsson, will be named chairman.

The American depositary shares of Ericsson gained 19 cents, or 3.6%, to $5.55 in recent Nasdaq trading, while Sony rose 12 cents to $73.60 on the New York Stock Exchange.