Microsoft China is buying 15 million shares of China's Sichuan Changhong Electric, one of the mainland's largest television makers.

Microsoft will pay 94.05 million yuan for the shares at a price of 6.27 yuan each and they will not be tradable for 36 months from the end of Changhong's non-public offering of 400 million shares, a statement from Changhong said.

Changhong is raising 2.5 billion yuan to develop its plasma display panel (PDP) production line by selling 400 million shares for no less than 6.27 yuan each.

Market speculation led to a surge in the value of Changhong shares last week, increasing 9.97 percent to 9.93 yuan on Thursday.

Microsoft signed a memorandum of understanding with Changhong on Friday to cooperate in products that connect televisions with computers and the Internet, according to the statement.

In 2004, Changhong and Microsoft signed an agreement to cooperate in the field of multimedia, which Changhong said would help consolidate and develop its market share in China's multimedia market.