TCL ELECTRONICS (01070) has announced that on March 31, 2026, after trading hours, TTE Corporation, its direct wholly-owned subsidiary, entered into a transaction framework agreement with Sony. According to the agreement, (i) TTE Corporation and Sony will establish a joint venture company to undertake the home entertainment business; and (ii) TTE Corporation will acquire 100% of the shares of SOEM from Sony. The initial capital contributions to the new company by Sony and TTE Corporation will be 49% and 51%, respectively.
On the same date, after trading hours, the Company entered into a buyer guarantee agreement with Sony. Under this agreement, the Company provides an unconditional, irrevocable, and several guarantee to Sony, its successors, and permitted assigns, ensuring that TTE Corporation will punctually and properly fulfill all its covenants and obligations under the transaction framework agreement, the joint venture agreement, and the transition services agreement.
On or before the closing date, the parties and/or their respective affiliates will also enter into the following ancillary agreements: Sony and TTE Corporation will execute a joint venture agreement, effective from the closing date, to govern the establishment, operation, and management of the new company. This agreement will grant Sony a put option and a default exit right from TTE Corporation, while Sony will grant TTE Corporation a default call option.
Sony and TTE Corporation will enter into a transition services agreement. Under this agreement, Sony will provide, or cause its affiliates or third-party suppliers to provide, relevant services—including information technology, human resources, intellectual property, accounting, and other transitional services—to the new company, SOEM, and related affiliates. This is to ensure the continuity of the home entertainment business for the service recipients without interruption.
Sony and the new company will enter into a patent/proprietary technology license agreement and a brand license agreement. These agreements grant the new company a non-exclusive, sub-licensable, and non-transferable license to (i) launch authorized products globally based on certain intellectual property, and (ii) use the "SONY" trademark on authorized products and related marketing materials worldwide.
The Board of Directors believes this transaction represents an excellent opportunity for both parties to integrate their superior resources and jointly build a platform for sustainable growth. It is expected to deepen the Company's global leadership in the smart terminal industry, aligning with the Group's "Globalization" and "Mid-to-High End" strategies.
By leveraging Sony's long-accumulated expertise in high-quality picture and sound technology, brand value, and operational capabilities—including supply chain management—alongside the Group's advanced display technology, global scale advantages, comprehensive industrial layout, end-to-end cost efficiency, and vertical supply chain strengths, the transaction is anticipated to yield the following strategic benefits:
The integration of both parties' technologies and innovations is set to lead advancements in premiumization and home entertainment technology. Their complementary strengths in research and development, combining Sony's leading picture calibration technology and proprietary chip technology with the Group's advanced display and smart hardware technologies, will create a strong and lasting competitive advantage. This synergy is expected to accelerate breakthroughs in the high-end market and drive the global upgrade of home entertainment technology.
Collaborating with Sony will deepen brand synergy, enriching the Group's product portfolio and elevating its global brand positioning. The transaction enables the Group to utilize Sony's world-renowned premium brands, "Sony" and "BRAVIA," along with its loyal high-end customer base. By diversifying its product offerings, the Group will accelerate its "Mid-to-High End" strategy, effectively raising its market positioning to the ultra-premium segment. Furthermore, by leveraging Sony's exceptional brand reputation and global sales network, the Group can further penetrate international markets, increase its share in the global high-end TV segment, and steadily advance its "Globalization" strategy.
Relying on its full industrial chain advantages, the Group will fully realize the strategic value of this cooperation. Through its vertically integrated supply chain and global production capacity, the strategic benefits of the transaction are expected to be maximized. Additionally, by combining the brand influence and resource integration of both the Group and Sony, the joint venture will establish a superior production, logistics, and service network, enhancing operational reliability. This will enable the delivery of more competitive products and services to global users, supporting the high-quality development of the Group's business.
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