Merger creates TV giant

China’s TCL International and France’s Thomson today agreed to form a company that they believe will eventually become the world’s largest manufacturer of television sets.

China’s TCL International and France’s Thomson today signed a memorandum of understanding (MOU) to form a joint venture company named TCL-Thomson Electronics. Under the MOU, TCL International and Thomson intend to merge their respective TV and DVD businesses and assets into the new company.

TCL International will contribute all its television and DVD manufacturing plants in China, Vietnam and Germany as well as its R&D centres and sales network.

Thomson will contribute all its television manufacturing plants in Mexico, Poland and Thailand, all DVD sales business, and all TV and DVD R&D centres. The combined total asset value will be in excess of 450 million Euros.

TCL International will be the major shareholder in the new company, with an equity stake of 67%, while Thomson will hold the remaining equity stake of 33%.

The formation of the new company is expected to be completed during the first half of 2004, subject to the signing of definitive agreements and approvals by shareholders and necessary regulatory authorities.