Microsoft to acquire shares in Chinese TV giant

The US software giant will acquire 15 million shares of Sichuan Changhong Electric to consolidate their market in the multimedia segment.

US software giant, Microsoft will acquire 15 million shares of Sichuan Changhong Electric, one of the largest Chinese television makers, to consolidate their market in the multimedia segment, it was announced on Monday.

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Microsoft China will pay 94.05 million yuan for the shares at a price of 6.27 yuan each and they will not be tradable for 36 months from the end of Changhong's non-public offering of 400 million shares, a statement from Changhong said.

Changhong is raising 2.5 billion yuan to develop its plasma display panel (PDP) production line by selling 400 million shares for no less than 6.27 yuan each.

Market speculation led to a surge in the value of Changhong shares last week, increasing 9.97 per cent to 9.93 yuan on Thursday.

Microsoft signed a memorandum of understanding with Changhong on Friday to cooperate in products that connect televisions with computers and the Internet, Xinhua news agency quoted the statement as saying.

In 2004, Changhong and Microsoft signed an agreement to cooperate in the field of multimedia, which Changhong said would help consolidate and develop its market share in China's multimedia market.