Microsoft Takes $12M Stake In Chinese Game Maker

[FarCry]

HONG KONG (Dow Jones) -- Microsoft Corp. will take a stake in Shanghai-listed Changhong Electric Co. and work with the firm to jointly develop entertainment products that can be accessed via the Internet, Changhong said.

 

Changhong Electric said in a statement on Monday that Microsoft will take a 94-million-yuan ($12.3 million) stake in the firm by purchasing 15 million new shares.

 

In Shanghai trading Monday, shares of Changhong Electric were halted in trading after climbing their daily 10% limit. Microsoft (MSFT) will not be allowed to trade the new shares for 36 months.

 

The statement also said Microsoft will collaborate with the Chinese firm on a "Media Galaxy" project, which involves developing entertainment products that would link televisions and personal computers at home over the Internet.

 

"Cooperating with Microsoft on this project will benefit Changhong by strengthening our competitiveness in the area of information home electronics," Changhong said in a statement.

 

Changhong Electric is reportedly one of the few Chinese companies working to merge TV functions with computers and the Internet.

 

Analysts said the scale of the investment was small but provided a foundation for Microsoft to ramp up its stake in the future.

 

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