Ericsson Reaches Deal to Sell US Firm to Koch Unit

Swedish telecom-equipment maker Ericsson AB reached a $1 billion deal to sell its US call-routing business Iconectiv to a private investment arm of Koch Inc.
Ericsson expects to get about 10.6 billion kronor in cash after taxes, transaction expenses and other liabilities as part of the takeover by Koch Equity Development, the company said in a statement late Friday. The deal is expected to close in the first half of 2025 and result in one-time earnings of about 8.8 billion kronor. 
Ericsson has been working to cut costs and improve margins in a challenging telecom-equipment market. The company, along with its Nordic competitor Nokia Oyj, has been struggling with dismal demand for years as anticipated spending on 5G technology failed to materialize. 
Ericsson had begun a sales process for Iconectiv in 2020, Bloomberg News reported at the time. The unit was expected to be valued at about $1.5 billion to $2 billion then. 
Koch, a sprawling conglomerate that’s best known for its refineries and chemical plants, has long been a huge investor in technology and growth equity. In 2020, Koch Equity Development bought the rest of cloud-software maker Infor Inc. that Koch didn’t already own in a deal that valued the firm at $11 billion, or nearly $13 billion including preferred shares. 
Bridgewater, New Jersey-based Iconectiv provides communications solutions to more than 5,000 customers including telecom companies and government agencies, according to Ericsson’s statement and the company’s website. It also provides numbering solutions, which allows users keep their numbers when switching providers, and has worked with clients including AT&T Inc. and Verizon Communications Inc., the website shows. 
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