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Chinese wireless Internet operator Tom Online said it will acquire a Beijing-based peer at a price of as much as US$66.4 million to expand its leadership in the market.
The company, listed on the Hong Kong Growth Enterprise Market (GEM) and the NASDAQ stock market in New York, said Wednesday it had signed an agreement with Treasure Base Investments Ltd about the deal.
"This is a good timing for us to consolidate the wireless value-added service market, as it is very fragmented," said Elaine Feng, executive director of Tom Online, over the phone.
Treasure Base controls the Beijing-based Ling Xun Interactive Science Technology & Development Co Ltd, which is one of the top 10 wireless value-added service providers of China Mobile, the country's biggest mobile carrier.
Ling Xun has exclusive agreements with China Central TV Channel 5 (CCTV5), the dominant sports channel in China, as well as Beijing TV and other TV channels to provide interactive products and services to the audience. Its profits were US$3.8 million in the first half of the year.
Feng expected the purchase to bring enriched sports content and a TV distribution platform to Tom Online.
With the acquisition, Tom Online will have a distribution platform for more than 60 TV channels and 1.5 million subscribers.
Tom Online's sports-related business will be greatly enhanced and it will launch a short messaging service, a multimedia messaging service, a wireless application protocol, and an interactive voice response services related with the coming Olympic Games and the National Basketball Association.
The all-cash payment will depend on the performance of Treasure Base in this year and the next, but will not exceed US$66.4 million.
(China Daily August 12, 2004)
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