Thomson SA, the biggest supplier of televisions in the United States, will merge its TV business with TCL International Holdings Ltd, China's largest television seller, creating a venture with more than US$3.5 billion in sales.
Thomson, the Paris-based maker of RCA brand televisions, and TCL, based in Huizhou, China, will combine their television and DVD-player operations, the companies said in separate statements. TCL will own 67 percent of a company called TCL-Thomson Electronics, and Thomson the remaining 33 percent.
Thomson Chief Executive Charles Dehelly has already announced 1,200 job cuts in the US and shifted production to China, whose two dozen TV producers are increasing their share of the North American market because of lower costs.
TCL's parent is planning to sell shares in China to help fund over-seas expansion after profit from its mobile-phone business slumped.
China is the world's largest TV market and manufacturer, with 20 million units sold locally and 11.4 million exported in the first seven months of this year, according to the Ministry of Information Industry.
TCL-Thomson will have com-bined assets of 450 million euros (US$527.13 million) and will sell as many as 18 million units a year, TCL said.
TCL, which ranks first by sales in China this year, has about 19 percent of the Chinese market. The company posted sales of HK$3.1 billion (US$399 million) from televi-sions in the third quarter. About a fifth of Thomson's 10.2 billion euros revenue last year came from televi-sions and other video products.
TCL has been expanding in Europe. Last year, the company bought assets from insolvent Ger-man TV maker Schneider Tech-nologies AG.
TCL also makes televisions for Royal Philips Electronics NV, which owns 4 percent of TCL Corp.
Under the agreement, Thomson will contribute all its television and DVD-player business, factories in Mexico, Poland and Thailand as well as 9,000 workers to the new com-pany.
The venture will focus on selling TCL brand in Asia, Thomson brand in Europe and RCA brand in North America, TCL said.
Thomson will also have the right to swap its one-third stake in TCL-Thomson for an unspecified num-ber of TCL shares within 18 months after the venture is formed, TCL said.