French telecomms giant Alcatel is forming a joint venture company with TCL Communication Technology of China to develop and sell mobile handsets.
Under the terms of a memorandum of understanding signed between the two, TCL Communication will be the major shareholder in the new company, with an equity stake of 55%, while Alcatel will hold the remaining 45%.
The formation of the joint venture company involves contributions from companies. 55 million Euros will come from TCL Communication and 45 million Euros from Alcatel.
The estimated net asset value of the joint venture company at closing is expected to be 100 million Euros.
While TCL Communication will contribute its share purely in cash, Alcatel will contribute cash and its mobile handset business, which includes around 600 R&D professionals and sales and marketing executives.
The formation of the new venture is expected to be completed during the third quarter of 2004, subject to the signing of definitive agreements and necessary approvals by shareholders and regulatory authorities.