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GigaMedia Letter of Intent in Relation To A Potential Acquisition

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GigaMedia Limited (NASDAQ: GIGM) (the "Company") today announced that, on May 8, 2015, the Company has entered into a non-binding letter of intent (the "Letter of Intent") with an independent third party in relation to the Company's potential acquisition of a controlling interest in a global cosmetics e-commerce company (the "Target") (the " Potential Acquisition").

Information on the Target

The Target is an established online distribution and retail platform of beauty products, with its own website and mobile application. It has a comprehensive sales and distribution network covering the major countries worldwide, with increasing contributions from the fast growing economies in Asia. The Target has also established a global sourcing network of a comprehensive range of beauty products with more than 700 brands and 30,000 stock keeping units. The Target has an annual net turnover of over US$ 200 million.

Major Reasons for the Potential Acquisition

Diversification of the Company's existing business and exposure to the fast growing cosmetics e-commerce market. As the Target is an established and proven e-commerce platform with existing customer base, the Company is of the view that the Potential Acquisition would help diversify the Company's overall business risks and broaden the Company's business portfolio in the Internet and technology sector, and allow the Company to tap into the fast growing beauty and cosmetics e-commerce market.

Potential synergies with the Target. The Company sees potential significant synergies with the Target from leveraging the Company's expertise in information technology, online and offline marketing, as well as its local connections in various Asian countries.

The Letter of Intent does not constitute any legally binding obligations on the parties in relation to the Potential Acquisition. The Potential Acquisition is subject to satisfactory due diligence by the Company, negotiation of the definitive binding agreements, obtaining of all the necessary corporate and regulatory approvals and waivers.

 

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