Tom Group Limited (TOM) announced Thursday that the company will invest 10 million US dollars to acquire a 35 percent stake in Huayi Brothers International Holdings Co. Ltd (Huayi Brothers), one of the most successful and profitable private company in film and television business in the Chinese mainland.

TOM announced at a press conference that according to an agreement signed between the two companies, TOM will acquire a 27 percent stake in Huayi Brothers for a total consideration of 5 million dollars payable in cash. TOM will also subscribe to 5 million US dollars of convertible bonds, payable in cash, which upon conversion will increase TOM's stake in Huayi Brothers to 35 percent.

TOM said the cooperation is expected to introduce tens of million of HK dollar in funding for Huayi Brothers each year. Huayi Brothers will invite investors or strategic partners to take part in the investment for producing each film.

In the long term, both TOM and Huayi Brothers share the goal of either seeking the listing of Huayi Brothers or finding a Hollywood strategic investor within three years.

TOM and Huayi Brothers agreed that, in the next few years, TOM and other investors can increase their stakes up to around 50 percent in next few years.

TOM Group Chief Executive Officer Sing Wang said "Huayi Brothers is one of the largest domestic movie-making company in China. Their output is nearly one-third of the Chinese mainland's domestic production.

He added that Huayi Brothers has a track record of box-office success in the past three yeas and are recognized internationally as one of the most successful and dynamic players in the entertainment industry.

Wang said, "our investment in Huayi Brothers is both logical and synergistic to our existing business portfolio. Huayi Brothers also brings us access to some of the most exciting talents in Chinese mainland today."

Huayi Brothers Founder and CEO Wang Zongjun was delighted with the partnership, saying "as one of the key players in the industry, we are glad to see the gradual opening up of the Chinese mainland to foreign investment in the film production business.

Wang Zhongjun said the partnership between Huayi Brothers and TOM represents a step forward in the development of entertainment industry in the Chinese mainland.

He believed that this partnership will bring broader opportunities to both companies.

TOM, a leading Chinese language media group in Hong Kong, is listed on the Main Board of the Stock Exchange of Hong Kong. It has diverse business interests in five key areas: Internet, outdoor, publishing, sports, television and entertainment across markets in the Chinese mainland, Taiwan and Hong Kong.

Huayi Brothers is the largest private company in movie and TV drama business in the Chinese mainland. It began to be engaged in film business in 1999.

Source: Xinhua