Microsoft Corp. agreed to buy a stake in Sichuan Changhong Electric Co., China's second-biggest TV maker as part of plans to develop software that connects televisions to the Internet for China.
Because:
1. Microsoft is losing U.S. users for software that connects televisions to the Internet (Comcast Corp. will stop using Microsoft's applications for Internet TV services in Washington State).
2. China may pass the U.S. this year to become the market with the most high-speed Internet connections in the world, a service that enables users to watch films and TV shows over the Web.
3. Sichuan Changhong is looking for new products like Internet TVs because demand for their cathode-ray tube TVs is declining.
They will jointly develop computers and TVs that connect to the Web.
1. Microsoft will buy the 15 million new Sichuan Changhong shares for 6.27 yuan each. Microsoft agreed not to sell the shares for three years
2. Microsoft will provide Sichuan Changhong with software technologies to help develop electronics products.
3. Sichuan Changhong will use money from the share sale to Microsoft to help buy 75 percent of Dutch company Sterope Investments BV, owner of South Korean plasma-panel maker Orion PDP Co. 4. Sichuan Changhong will raise 2.5 billion yuan for the acquisition by selling 400 million new shares to 10 institutional investors.
Revenue is in knocking open another door when one door closes, and converging to diversify
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