Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) is in merger talks with Spice Mobile, an India handset-maker and division of BK Modi, according to the Economic Times, which cited sources close to the deal. Spice Mobile’s Web site says their phones focus on the intersection of “information, communication and entertainment” with devices that range from entry-level to high-end. The BK Modi Group, which owns 64 percent in the handset maker, had asked for 80-100 rupees per share, which would value the company at up to $174 million, Reuters reports. Shares in Spice Mobile jumped nearly 10 percent to 24.95 rupees today after a top source in Spice group confirmed the development and said “while talks were on, the deal had not been finalized.” Sony Ericsson, which is a joint venture between Ericsson and Sony and has historically performed well based on its Walkman-branded phones, recently became the fifth largest handset manufacturer after falling behind LG (SEO: 066570) in the first quarter. The company has warned recently that there’s been slower demand for its mid-to-high end mobile phones and its delay in shipping some new products will hit its second quarter sales and earnings. The company has been further plagued by analysts, who started comparing them to Motorola (NYSE: MOT), the troubled handset maker.