Futong Technology and EMC Group set up JV

The JV will engage in selling, market and channel development of EMC products aims to strengthen market position and diversify product portfolio.

Futong Technology Development Holdings Limited (“Futong Technology”), a leading distributor of enterprise IT products in the PRC, is pleased to announce that it has entered into a Share Subscription Agreement through its wholly-owned subsidiary with a member of EMC Group (“EMC”). The agreement is made in an effort to form a joint venture between the Group and EMC, according to a Futong Technology report.

Under the Subscription Agreement, Etong Technology Holdings Limited (“Etong”), a wholly-owned subsidiary of the Group, will partner with EMC Computer Systems (FE) Limited (“EMC FE”), a member of EMC, to subscribe new shares in a joint venture with a consideration of RMB40,500,000 and RMB9,500,000 respectively. Upon closing of the Subscription, the joint venture will be held as to 81% by Etong and as to 19% by EMC FE. Proceeds from the Subscription will be used for capital expenditures and as general working capital of the joint venture.

The joint venture will principally be engaged in selling, market and channel development of EMC products as well as the provision of value added services. In particular, it will also be engaged in the business of software development, consulting, selling and implementation services based on EMC storage virtualization solution and business continuity solution.

Mr. Chen Jian, Chairman of Futong Technology, commented, “Following the signing of a MOU for a strategic partnership with EMC in July this year, the formation of the joint venture will thus lay the groundwork for closer cooperation leading to strengthened market position. More importantly, this strategic move represents EMC’s recognition of our extensive sales network and close relations with well-known enterprises in key industries. By working hand-in-hand with a strong industry player, and also importing a new range of products and services, we will be able to more effectively explore favorable business opportunities in the burgeoning PRC IT market.”