Kodak Signs Agreement with Chinese Imaging Firm
Oct 28, 2003
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China Lucky Film Corp., the country's only imaging enterprise, has reached a U.S. $100-million agreement with the U.S.-based Eastman Kodak.
Lucky signed the agreement on October 23, agreeing to transfer 20 percent of its stakes to the global imaging giant.
The agreement, whereby Lucky retains the majority of its stakes, continues to use its own brand and possesses the decision-making right, also helped maintain Lucky's flagship status in the national imaging industry.
An announcement by Lucky voiced said, "Kodak showed respect to Lucky's principles in its foreign cooperation."
Kodak usually asks for a majority stake when launching joint ventures, but made an exception in this case.
"Our first contact with Kodak started immediately after the U.S. company entered the domestic market, but disputes in the holding rights of majority stock shares failed the cooperation proposal at the early stage," said officials with Lucky.
Analysts say the move will further secure Lucky's presence in China, the world's second largest film market, and put pressure on Fuji, Kodak's global rival.
According to the new agreement, Kodak will contribute $45 million in cash and provide an emulsion-making line for color products.
Meanwhile, Kodak will provide $54.5 million and technical support to assist Lucky in upgrading its existing triacetate film base production and coating lines and offer an emulsion and coating line to Lucky free of charge.
With only a 20-percent stake in the listed company, Kodak has also promised in the agreement not to acquire Lucky's floating shares in the secondary market.
Lucky will, in turn, pay Kodak for the use of selected technologies, and pay dividends on the shares owned by Kodak.
Officials with Kodak and Lucky said the two companies hope the cooperation will help strengthen their competitive position and presence in new and existing markets, particularly among emerging markets in Asia. (XIC, Asia Pulse)
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