MANHASSET, N.Y. — A Chinese business unit of Royal Philips Electronics NV will buy an additional 5 percent stake in Chinese television and mobile phone maker TCL Corp., becoming the company's third-largest shareholder, TCL said Wednesday (Dec. 28) in an Associated Press report.
Philips Electronics China BV. will pay $25.3 million for 129.3 million TCL shares, bringing its total stake in the Chinese company to 7.46 percent, TCL reportedly said in a statement to the Shenzhen Stock Exchange.
The deal reportedly still requires government approval.
TCL, a partner with France's Thomson SA in the world's biggest television set production venture, has sought tie-ups with several international electronics giants, including Alcatel SA of France and Japan's Toshiba Corp., as it pushes ahead with an ambitious expansion program.
The company, based in the southern province of Guangdong, has forecasted sales of 22 million color television sets this year, the official Xinhua News Agency reportedly said Wednesday. That compares with TV sales of about 17 million units in 2004.
However, TCL reported a net loss of $85.5 million in the first-half of 2005, compared with a net profit a year earlier. It cited costs earlier in the year of integrating with its joint venture partners and a downturn in mobile phone sales.
Philips reportedly already holds a 2.5 percent stake in TCL, whose largest shareholder is the local government in Huizhou, Guangdong, the city where it is based. TCL executives hold the next largest number of shares.
The two companies set up a partnership in 2002, with TCL providing distribution and service for Philips' products in several Chinese provinces.