Swedish communication technology and services provider Ericsson (ERIC) Friday said it has signed a conditional agreement with Danish company NKT Cables to divest its power cable operation. The transaction is valued at SEK 250 million and closing is expected during the beginning of the third quarter.The transaction is expected to lead to a net loss of approximately SEK 100 million , and hurt business unit Networks' operating income in the third quarter.
Ericsson believes that the power cable operation that currently resides within business unit Networks has potential to realize greater leverage and scale within NKT Cables where it will be core business.
The net sales for the power cable operation in 2012 was approximately SEK 1.5 billion. Further, as a result of the agreement, about 320 employees and consultants, primarily based in Sweden, are expected to transfer to NKT Cables.
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