Microsoft Corp. has agreed to pay 94 million yuan ($12.3 million) for a stake
in Sichuan Changhong Electric Co., a major maker of televisions and electrical
appliances, the Chinese company said on Monday.
The two companies will cooperate to develop, make and market TVs, computers
and other digital home-entertainment products, Sichuan Changhong said.
Under a memorandum of understanding, the Chinese company would place 15
million new shares with Microsoft at a price of 6.27 yuan each, a 37 percent
discount to its last traded market price of 9.93 yuan.
The deal would give Microsoft a stake of nearly 1 percent in Sichuan
Changhong, according to Reuters calculations. The U.S. software giant would be a
long-term, strategic investor, Sichuan Changhong said.
The Chinese company, which posted sales of 4.97 billion yuan in the first
quarter of 2007 as net profit climbed 24 percent from a year earlier to 96.32
million yuan, said it would soon present the deal to its board for approval.