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Thomson buys Hughes arm

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CIOL Bureau
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PARIS: French electronics company Thomson SA said it would acquire the set-top box manufacturing assets of Hughes Network Systems for at least $250 million in cash.



The transaction is part of an agreement with DirecTV Group Inc., the parent company of Hughes Network Systems, for the development and supply of digital satellite set-top boxes for five years, Thomson said in a statement.



The agreement, expected to close in the second quarter of 2004, includes incentives to DirecTV, based on revenues and set-top box order volume to Thomson, that could increase the amount paid to as much as $400 million, including the up-front amount.



Thomson said it expected the contract to "more than double its current revenues with DirecTV". But Thomson would not give a figure for current revenues.



Thomson will be involved in the development of new set-top box models and will manufacture a full range of receivers including DirecTV brand high definition and digital video recorders (DVR) receivers.



© Reuters

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