TCL, a state-controlled China-listed firm selling electronic products, released an announcement at the Shenzhen Stock Exchange on Saturday, declaring the signing of a Share Subscription Agreement by its subsidiary HK-listed TCL Multimedia with Tianjin-based LeTV Zhixin, a subsidiary of LeTV, China’s leading video service provider.
According to the agreement, LeTV bought 348,850,000 shares of TCL Multimedia at the price of HKD 6.5 per share, through an investment of around USD 293 million (HKD 2,267,525,000) made by LeTV Zhixin’s wholly-owned subsidiary LeTV Zhixin Investment (HK) Ltd.
After this investment, LeTV will hold around 20% of the shares of TCL Multimedia through LeTV Zhixin, and will nominate two board directors.
TCL Multimedia, a subsidiary owned by TCL, is a TV manufacturing and distribution firm. It is shifting into a multimedia entertainment firm, moving into videos, education and games.
Leshi Zhixin, a subsidiary of LeTV, mainly sells intelligent terminals including internet TV and set-top boxes.
According to the announcement, TCL and LeTV will share resources, consolidate their user groups and jointly develop new products.
Firstly, they will integrate their resources, including supply chains, online and offline sales, and after-sales service.
They will also dig out more patterns for profit, combining their accumulated users (TCL has over 31 million users and LeTV has 4 million) and making use of their respective advantages in content and platform.
They will concentrate their cooperation in intelligent terminal hardware development, catering to the needs of high-end users and overseas users.