Global leading law firm Herbert Smith Freehills has advised consumer electronics manufacturer TCL Electronics Holdings Limited on an asset restructuring as part of a business transformation by its parent company TCL Holdings.
Under the terms of agreement, TCL Electronics acquired TCL Communication from its parent in a cash consideration of RMB1.5 billion and disposed of its interest in subsidiary Moka International in a cash consideration of RMB2.5billion. TCL Communication is one of the world’s leading mobile device companies with provision of Internet applications and services to its users while Moka International is engaged in TV ODM business with shipments of 11.36 million units in 2019.
“It is gratifying to see TCL’s continued growth over the past 12 years that I have been advising the company,” said Tom Chau, Head of Beijing office, “Congratulations to TCL on making significant progress in its business transformation which has created the fundamentals for its future development.”
“The deal was completed during the uncertainties of the pandemic, and all professionals participating in the deal had to collaborate closely to meet the timeline despite the difficulties.”
“We are grateful for the trust that the client placed in us, reflecting the strength of our long-term relationship,” said Tom.
As usual, other than providing general legal advice, the team also contributed suggestions on the client’s strategic business development. This is consistent with a commentary made by the People’s Daily in August 2019 – Tom is used to provide strategic advice to clients in outbound M&A transactions. Upon completion, TCL Electronics will shift its focus from asset-heavy and labour-intensive ODM businesses to mobile device and Internet applications and services, paving the way for its parent company’s new “AI x IoT” strategy and a plan to “build a smart living ecosystem”.
Tom led the team, supported by senior associate Sherry Lai in Hong Kong and paralegal Iris Zhu in Beijing.