LAWFUEL – China Law News, Law Jobs Worldwide- Chinese multimedia company TOM Online and US e-commerce company eBay Inc. yesterday announced the signing of a joint venture agreement that will set the foundation for the next phase of growth of e-commerce and m-commerce in the rapidly growing China market.
International law firm Freshfields Bruckhaus Deringer advised TOM Online on the joint venture agreement with eBay EachNet, eBay’s China-based subsidiary. TOM Online will have a 51 per cent stake in the joint venture, and eBay will have the other 49 per cent. At closing, eBay International AG will provide and initial funding of US$40m in cash in the form of capital of the joint venture and TOM Online will enter into a shareholder’s loan agreement with the joint venture, under which, TOM Online will provide a shareholder’s loan in the amount of US$20m to the joint venture. It is intended that the joint venture will design, develop, launch and operate a new online platform, which will be branded TOM EACHNET and/or 易趣 , to support the internet-based marketplace.
The joint venture brings together the strength of both companies – TOM Online’s local market knowledge and active wireless base of more than 75 million and eBay EachNet’s global e-commerce knowledge and large and active trading community in China. It also builds on the existing relationship between TOM Online and eBay’s online communications business, Skype.
China’s Internet population grew by 19 per cent last year to over 123 million users and the country has more than 400 million mobile users.
Partner Connie Carnabuci led the Freshfields Bruckhaus Deringer team. Connie commented, ‘This is a good match of core competencies, which should allow the joint venture to exploit the emerging online marketplace in China.’
Connie was assisted by Jennifer Li and Derek Shi from the Hong Kong office.