Linktone Ltd to Buy Beijing Cosmos Digital Technology Co for Undisclosed Sum
Associated Press
2005-01-12

NEW YORK (AP) - Linktone Ltd., a provider of wireless value-added services to mobile phone users in China, on Wednesday said it agreed to buy Beijing Cosmos Digital Technology Co., a privately held provider of wireless application protocol services, or WAP, to mobile operating giant China Unicom.

Terms of the deal were not disclosed. However, China Unicom said Cosmos Digital was No. 6 in revenue contribution among all WAP providers on its nationwide network in December, up from No. 10 in June.

Chinese company Linktone will acquire 100 percent of Cosmos Digital's outstanding shares in cash from existing reserves. The deal is expected to close in February, subject to China regulatory approval, at which time Cosmos Digital will become a unit of Linktone.

Cosmos Digital, headquartered in Beijing, employs 40 product development and marketing professionals and offers 24 services on China Unicom's WAP network, including ringtone and picture products, chat applications, infotainment services, and Korea-licensed games.

Linktone expects the deal to be accretive earnings for fiscal 2005. China Unicom made up 13 percent of Linktone's gross revenue for the third quarter ended Sept. 30.

Linktone shares fell 4 cents to $7.77 in midday trading on the Nasdaq.