China Electronics Corporation (CEC), one of the state-owned conglomerates, has signed an agreement with Royal Philips Electronic (Philips) to take over Philips's mobile phone business.

 

CEC will receive an exclusive license to market and sell mobile phones under the Philips brand in the coming five years. Certain mobile phone-related patents will be transferred and licensed to CEC.

 

The "Xenium" brand, which is concerned with long-battery life, will be transferred to CEC according to the agreement.

 

In addition, Philips will transfer to CEC its existing international marketing network for the mobile phone business, as well as its 25 percent equity stake in Shenzhen Sangfei Consumer Communications Co.Ltd, which is an affiliated company of CEC.

 

The deal is expected to be closed by the end of the first quarter.

 

CEC will be fully responsible for the designing and research, production and marketing of the Philips mobiles and Philips will continue to provide product quality control and brand support, said Chen Zhaoxiong, general manager of CEC on the signing ceremony on Monday.

 

Philips is a leading company in the global electronics and information industry with a sales revenue of 27 billion euros in 2006, 12 percent of which comes from its mobile phone business.

 

CEC is one of the key state-owned enterprises under the direct administration of the central government.

 

It's a leading Chinese company in electronics and information industry with a sales revenue of 60.1 billion yuan (US$7.8 billion) in 2006, 15.3 percent of which comes from its mobile business.

 

(Xinhua News Agency February 14, 2007)