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TCL, Alcatel to jointly design, make cellphones
(Agencies)
Updated: 2004-04-27 14:44

Alcatel SA is to exchange its mobile phone handset operations for a minority stake in a joint venture with TCL Communication Technology Holdings Ltd, the companies announced Monday.

The move will allow TCL to expand outside its native China and Alcatel to off-load a loss-making division.

The joint venture will absorb Alcatel's loss-making cellular handset business, including 600 research, development, sales and marketing staff, under the terms of the preliminary deal signed by the companies.

In addition to the handset business, Alcatel, in Paris, will also provide an unspecified cash payment to take the total value of its contribution to 45 million euros (US$53.2 million), for which it will get a 45 percent share in the venture.

TCL, one of China's top two cellular handset manufacturers, will contribute 55 million euros in cash and take a majority 55 percent stake.

The companies expect to finalize the deal during the third quarter, they said in a joint statement. It will be subject to shareholder and regulator approval.

The new company, which has yet to be named, will sell telephones under the Alcatel brand name.

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