u-blox's cellular module acquisition terminated

Swiss module manufacturer u-blox has announced that it will not proceed with its acquisition of the SIMCom cellular module product line from Shanghai-based SIM Technology Group.

Originally announced in January this year, the acquisition would have seen u-blox take control of SIM Technology Group’s cellular modem products, patents and know-how, R&D and sales staff, and customer base. But despite the best efforts of both parties, the deal could not be closed as originally intended and the companies were unable to find alternatives that worked for both while sustaining the intended benefits. Both parties have therefore decided to amicably terminate the asset purchase agreement and technology assignment contract.

“While we are disappointed that the deal has not come to fruition, u-blox and SIM Technology Group Limited continue to have a good relationship and expect to find other ways of working together in the future,” said u-blox CEO Thomas Seiler, who added that u-blox’s strategy for cellular products remains focused on growth.

“For some time now we have been working on adapting our product range to achieve a stronger geographical diversification mainly for the Asian markets, where we make 50% of our global revenue,” Seiler said. “The strong move to LTE-based connectivity will naturally open new strategic windows. Our strong focus and investment in our own chipset development, especially for IoT applications, is a key part of our strategy. Our guidance indicates a continued strong growth.”

As a result of the contract termination, u-blox has revised its guidance figures for 2017 back to levels as provided on 11 January 2017, expecting revenues of US$420–$436 million.