Intel buys ST-Ericsson GPS unit

Intel has bought the global navigation satellite system division of ST-Ericsson, acquiring assets, intellectual property and staff to enhance its mobile chip business.

The chip giant is taking over the GPS unit of the loss-making fabless joint venture between STMicroelectronics and Ericsson aimed at wireless and semiconductor products in the mobile sector, according to the EETimes.

The financial details of the transaction were not revealed, but STMicroelectronics said that the sale will reduce the cost of closing ST-Ericsson by an estimated $90 million (£59 million), thanks to a combination of cash from Intel and the fact that it will no longer have to make redundancy payments to employees joining Intel.

STMicroelectronics revealed that the cost of closing the business would amount to between $350 million (£231 million) and $450 million (£298 million), making the sale of assets vital. The parent companies are absorbing some assets and employees, while 1,600 people will lose their jobs.

AMD, Nvidia, Texas Instruments and Qualcomm were previously cited as parties interested in acquiring ST-Ericsson or some of its products, but it remains to be seen if STMicroelectronics and Ericsson can offload other assets.

Among the terms of the acquisition, Intel will acquire intellectual property and a team of 130 employees in England, India and Singapore. They are expected to join Intel's wireless platform research and development business.

The deal, which is subject to regulatory approval, is expected to close in August.