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Elcoteq SE Concentrates Its European Manufacturing To Pécs, Hungary and Sells Tallinn Manufacturing Operations to Ericsson


Elcoteq has signed an agreement with Ericsson to sell the majority of its operations in Tallinn. The transaction includes machinery, materials and the lease agreement of the plant building. The transaction value is approximately 30 million euros. Most employees will continue working with existing terms for Ericsson. Elcoteq will retain specialized manufacturing capacity in Estonia to serve its other customers. Deliveries to Ericsson continue from other Elcoteq plants.

Elcoteq and Ericsson have concluded an agreement whereby Elcoteq sells the majority of the machinery, equipment and materials of its Tallinn manufacturing operations to Ericsson. The agreement also includes transfer of the lease agreement concerning manufacturing premises and employment agreements related to these operations. The transaction value is approximately 30 million euros. The transaction will not have an impact on profitability at annual level. The revenue generated by the transferred business is less than 200 million euros annually. The transaction is expected to close by the end of July 2009 and requires formal approval by the relevant anti-trust authorities.

Elcoteq has reduced its manufacturing capacity through the Restructuring Plan launched in January to adapt to the radical changes in the market situation. A further step in this process has now been taken since it was estimated that one major plant in Europe is enough to match the current and short-term forecasted manufacturing volumes. European high-volume manufacturing will be concentrated in Elcoteq’s plant in Pécs, Hungary. Deliveries to Ericsson continue from other Elcoteq plants.

Elcoteq currently employs approximately 1,600 persons in Tallinn, of which approximately 1,200 will be transferred to Ericsson and will continue their employment based on existing terms and conditions. Elcoteq will continue operations in Tallinn on a smaller scale in a specialized plant.

About Elcoteq
Elcoteq SE is a leading electronics manufacturing services (EMS) company in the communications technology field. Elcoteq’s global service offering covers the entire lifecycle of products, from product development to after market services. By further combining mechanics expertise into its service offering, Elcoteq’s vision is to be a leading integrated electronics manufacturing services (IEMS) company.

Elcoteq provides global end-to-end solutions consisting of product development services, supply chain management, NPI, manufacturing, and after market services for the whole lifecycle of its customers’ products. These products include Personal Communications products such as mobile phones and their parts, Home Communications products such as set-top boxes and flat panel TVs as well as Communications Networks products such as base-stations, tower-top amplifiers, and microwave systems.

Elcoteq operates in 15 countries on four continents and employs some 15,000 people. The Group’s consolidated net sales for 2008 totaled 3.4 billion euros. Elcoteq SE is listed on the Nasdaq OMX Helsinki Ltd. For more information visit the Elcoteq website at


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