Ericsson launches tender offer to buy preferred shares in Brazilian subsidiary

Ericsson launches tender offer to buy preferred shares in Brazilian subsidiary Ericsson has today launched a tender offer to acquire the preferred shares (non-voting rights) of its listed subsidiary Ericsson S.A. in Brazil. The offer is made through the wholly owned Ericsson subsidiary Sielte S.A. in Brazil. Ericsson at present owns 95% of the voting shares and 51% of the total shares in Ericsson S.A. If the bid is accepted by all preferred shareholders, Ericsson's share of Ericsson S.A.'s capital, will increase to about 99%. The Brazilian telecom market is characterized by high growth and price pressure due to the lively competition among international telecom suppliers and operators, something, which has increased during the ongoing liberalization of the market. The background to the offer is to give Ericsson S.A. a competitive position to act fast and with flexibility within a global and seamless Ericsson organization on the growing globalized market. Ericsson S.A. will remain listed in Brazil. The tender offer carries a fixed price of R$ 37.11 per thousand shares. This price was set representing a premium of 55% over the last closing price of R$ 23.90 and a 53% premium over the average price of the last 90 days. The total number of outstanding preferred shares is 20.2 billion. The total offer amounts to 749 MR$ equivalent to approximately 640 MUSD. Shareholders willing to accept the offer should tender their shares at the Sao Paulo Stock Exchange on September 2, 1998. The offer will remain open until September 16, 1998. JP Morgan is advising Ericsson in this transaction. Ericsson has been operating in Brazil for more than 100 years. Net sales in 1997 was 1.25 BUSD. Ericsson has more than 2,200 employees and a good market position in both the fixed and mobile systems area. Ericsson´s 100,000 employees are active in more than 130 countries. Their combined expertise in fixed and mobile networks, mobile phones and infocom systems makes Ericsson a world-leading supplier in telecommunications. FOR FURTHER INFORMATION, PLEASE CONTACT Pia Gideon, Manager, External Relations Phone: +46 8 719 2864 or +46 70 519 2864 E-mail: pia.gideon@lme.ericsson.se Johan Fant, Senior Vice President, Corporate Financial Control Phone: +46 8 719 3707 or +46 70 540 4011 E-mail: johan.fant@lme.ericsson.se