MUMBAI: The Indian gaming industry is heating up and how on the world stage. Nasdaq-listed TOM Online Inc, China's leading wireless Internet company, announced today it is acquiring 80.6 per cent stake in Mumbai-based wireless game producer Indiagames Ltd for a cash consideration of $17.73 million.

TOM Online said the acquisition would help "establish its wireless game presence not only in India and China, but also vastly broaden its horizon for growth globally." Indiagames is a game developer and publisher of mobile entertainment content for a wide range of global clients.

TOM Online has acquired around 77 per cent of Indiagames' existing shares from investors including Infinity Ventures, IL&FS Investment Managers and the management team of Indiagames; the remainder of the shares in discussion will be in the form of new shares valued at $4 million. Key management staff including founder-promoter and CEO Vishal Gondal will retain the remaining 19.4 per cent share in the company and continue to run the operations of the company.

For TOM Online, the acquisition will help catapult its integrated Internet products and services onto the world stage with access to truly global partners and distribution channels. This, the company says, is a first for any Chinese portal and will help further enhance its business growth both inside and outside China.

"TOM Online has successfully built a strong leadership in China's wireless Internet sector, which makes Indiagames the most befitting addition to our existing business lines. It will be the driving force behind our game-related services development and expansion in the Indian wireless Internet sector. There are tremendous synergistic opportunities between Indiagames and TOM Online that will enable us to utilize each other's strengths in our respective markets in areas such as content, services, worldwide distribution channels, partnership referrals and market knowledge," says TOM Online chief executive officer and executive director Wang Lei Lei.

Adds Gondal: "Indiagames already has a strong presence in major markets like Europe and North America, and a major market share in India in the wireless gaming segment. With TOM Online's popular online platform and expertise in China's local wireless entertainment business, we will have access to a total of more than one billion mobile phone users and gain a leadership position in the two largest emerging wireless entertainment markets in the world -- India and China."

With over 160 professionals based in Mumbai, Indiagames has established partnerships with all major mobile operators in India and over 100 channel partners globally. Major global distribution channels include Vodafone, O2, T-Mobile, Orange, Verizon, Sprint, Singtel, Airtel, Tata, China Mobile, Optus, Hutch, Amena, Telefonica, O2, Wind and AT&T. Although it is based in India, 86 per cent of its sales this year came from Europe, Asia Pacific, United States, Middle East and South Africa. The company has established diversified revenue streams from mobile games publishing and third-party development and has been profitable for the past two years with a net margin of just under 50 per cent.