Cisco will invest $16 million in the new firm,
which has not been named and is still being registered, and hold
a 20 percent stake, the filing said. TCL will pay $64 million
for an 80 percent share. These investments will be made over
three stages, each of which will require the approval of both
parties. No timeframe for the investments was given.
The agreement follows other U.S. technology firms -- including
Amazon.com Inc, IBM Corp and Microsoft Corp -- as they move into
cloud computing services in China, undeterred by the rocky
business climate for American companies with tensions between
the world's two largest economies over cybersecurity.
The new company will build data centers in China, and set up
cloud-based video communication and collaborative office systems
for Chinese small- and medium-sized enterprises and industry
users.
The size of the joint venture may be expanded, based on market
needs and the development of the company, TCL said. TCL, through
an offshore affiliate, will name four directors and Cisco will
name one. The affiliate will also be responsible for deciding on
the core management team.
(Reporting by Paul Carsten; editing by David Evans)
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