Amdocs has announced that it is selling an 81% stake in its Chinese subsidiary, Longshine to a newly-formed and locally-managed entity, Longshine Technology Holding for an undisclosed amount. Amdocs said that it will record an after-tax charge of between US$18.5 million and US$22.6 million from the divestiture.
"We are very excited about the opportunities that this deal will bring about locally, and we feel confident that Longshine will continue to service its customers well," said XianBiao Zheng, CEO of Longshine. "We see this as a step forward in allowing both companies to focus on their areas of competitive strength."
Following the sale, Amdocs will continue to offer its CES 8 products throughout China and support current customers, including Beijing Mobile in its Beijing support center. In addition, Amdocs plans to continue to operate and grow its delivery center in Tianjin.
"Amdocs is committed to success in China. However, the market dynamics have not evolved in the way we had anticipated when we acquired Longshine in 2005," said Ayal Shiran, head of the Customer Business Group for Amdocs Management. "At this juncture, many Chinese telecommunications companies are still demanding locally-driven, custom built system development from companies like Longshine, while much of Amdocs' strength lies in our industry-leading CES 8 portfolio and our success in delivering our own products. We feel both models hold value for China; however, we made the decision to seek local leadership to maximize the opportunity that exists today for Longshine and better enable Amdocs to focus on its core value proposition."
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