China's leading electronics company, TCL Corporation, announced here that it signed an agreement last weekend with the French wiring giant Legrand on transferring its two subsidiaries for 1.69 billion yuan (US$209.3 million).
The move marks another TCL asset restructuring in the international market since it merged and acquired the TV business of Thomson and the mobile handset business of Alcatel.
According to the new agreement, two non-core subsidiaries of TCL - TCL International Electrical (Huizhou) and TCL Building Technology (Huizhou) Co., Ltd - will be transfered to the Legrand Group.
To be completed before the end of the year, TCL expects to profit 1.2 billion yuan from the stake transfer.
Li Dongsheng, chairman of board and CEO of TCL, said that TCL will pay more attention to core business in the future and shake off non-core businesses by many channels like merging, selling or restructuring.
TCL is confident of growing up into a leading world supplier of consumer electronics, he said.
The transferred TCL International Electrical, founded in 1993, now owns 12 percent of China's domestic wiring device market. Founded in 2004, TCL Building Technology is the supplier of datacom (Voice, Data, Image) installation products and systems.
In 2004, the annual sales revenue of these two subsidiaries amounted to about 600 million yuan (some US$74.3 million), said sources with the TCL.
The agreement said Legrand may continue to use the brand TCL in the coming eight years, but needed to pay TCL each year for the brand use.
Gilles Schnepp, CEO of Legrand, said that the cooperation with TCL will help Legrand expand business in the China market.
French-based newspaper Le Figaro said that the purchase opens the door to the China market for Legrand. China owns a large wiring device market worth about six billion euros, and the market is still growing at an annual rate of over 10 percent, said the newspaper.
Legrand Group is the world specialist of products and systems for electrical installations and information networks. It commands 18 percent of the global market.
(Xinhua News Agency December 13, 2005)