Handset-maker Sony Ericsson is in talks to acquire Indian company Spice Mobile, according to a report in India’s Economic Times, which cites Spice sources. Sony Ericsson is reportedly looking at acquiring the 64 percent stake in the company owned by the Modi Group and the report suggests that Modi has asked for around Rs 80-100 per share, which values Spice Mobile at around Rs 700 crore (US$162 million). According to the source, Spice Mobile had initially approached Sony Ericsson for a “wide-ranging collaboration and partnership” before negotiations advanced to consider an acquisition.

According to the Economic Times, Sony Ericsson is the third-largest player in the Indian handset market after Nokia and Samsung. However, the report notes that with Spice Mobile shipping a reported 200,000 handsets a month and Sony Ericsson shipping an estimated 400,000 a month, a combination of the two businesses would make it India’s second-largest handset vendor. Spice Mobile is focussed on low-cost handsets and has previously hinted that it plans to sell 10 million of its sub-US$20 handsets this year.