TCL Corp, China's largest publicly traded consumer electronics maker, will set up a mobile-phone venture with Alcatel SA to boost production ahead of the Chinese handset maker's planned initial share sale this year.

　　TCL Mobile Communication Co, based in Huizhou in southern China, will merge its cellular-phone manufacturing business with that of Paris-based Alcatel in a venture that would boost TCL's handset sales by three-quarters, according to an e-mailed statement. TCL will own 55 percent of the venture.

　　TCL, the fourth-largest cell-phone vendor in China, has said it wants to expand sales in Europe and the United States. Alcatel has sought to exit the handset business after failing to compete with Nokia Oyj and Motorola Inc.

　　Last year, TCL Mobile sold 9.8 million handsets and earned 782 million Hong Kong dollars (US$100 million). Alcatel, which sold 7.6 million phones last year, said its handset unit was "close to breakeven" for the fourth quarter of last year.

　　Shares of TCL Corp, which owns 36 percent of the handset unit, were suspended from trading in Shenzhen yesterday. Hong Kong-traded shares of TCL International Holdings Ltd, which owns 40.8 percent of the phone-maker, were also suspended.

　　The venture will have a net asset value of 100 million euros (US$118 million), according to the statement.

　　(Bloomberg News)