New Delhi, August 18: Swedish telecom-equipment maker Ericsson AB reportedly reached a USD 1 billion deal to sell its US call-routing business, iconectiv, to Koch Equity Development, a private investment arm of Koch Inc. The deal shows a significant move for Ericsson to continue to reshape its business. The agreement is anticipated to be finalised during the first half of 2025 and is projected to generate one-time earnings of approximately 8.8 billion kronor. The acquisition could lead to new opportunities for Iconectiv under Koch's management.

As per a report of Bloomberg, Ericsson reaches a deal to sell its US firm Iconectiv to Koch Unit, which is part of Koch Industries. Ericsson is estimated to receive approximately USD 1 billion in cash after making provisions for taxes, transaction expenses and other financial requirements as a result of the takeover by Koch Equity Development. Ericsson is one of the world's leading information and communication technology companies, which is headquartered in Stockholm, Sweden. Iconectiv has been an important contributor to the telecommunications industry by providing essential services like call routing business. Cognizant Salary Hike 2023: After Low Fresher Package, Tech Giant Now Offers Pay Hikes As Low as 1% After 4 Months Delay, Says Report.

According to multiple reports, Iconectiv, a company based in Bridgewater, New Jersey, offers communication solutions to over 5,000 customers, including telecom companies and government agencies. On the other hand, Koch, a well-known company with refineries and chemical plants, has a strong history of investing in technology and growth equity. In 2020, Koch Equity Development acquired the remaining shares of Infor Inc., a cloud software maker. It demonstrates Koch's interest in expanding its presence in the technology sector. Norwegian PM Jonas Gahr Store Inaugurates Europe’s First Gigawatt Battery Factory.

According to multiple reports, Ericsson has been making efforts to reduce expenses and enhance profitability in the telecom equipment industry. Alongside its competitor Nokia Oyj from the Nordic region, Ericsson has been facing difficulties due to weak demand for several years. It is said that the expected investment in 5G technology did not materialise as anticipated.

(The above story first appeared on LatestLY on Aug 18, 2024 04:54 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).