China Unicom’s Two Biggest Shareholders to Combine by
China Unicom (Hong Kong) Ltd., the country’s second-biggest mobile-phone company, said its two largest shareholders plan to combine by January, as part of a government-led reorganization of the telecommunications industry.
The proposed merger between China United Telecommunications Corp. and China Network Communications Group Corp. is pending approval from regulatory authorities, Unicom said in a statement to the Hong Kong stock exchange yesterday. The two shareholders will hold a combined 70.4 percent of Unicom, the statement said.
The planned transaction between the shareholders follows Unicom’s $16 billion stock-only acquisition of China Netcom Group Corp. last month, as the Chinese government consolidates smaller phone carriers to enable companies to offer both mobile-phone and fixed-line services. Licenses for third-generation wireless services will be issued after the revamp is completed, the government said.
China United will assume the debt of China Network following the merger, according to a separate statement filed to the Shanghai stock exchange today.
China Network, formerly the biggest shareholder in the now- acquired China Netcom, also holds about 20 percent of PCCW Ltd., Hong Kong’s biggest phone company. On Nov. 4, the Chinese shareholder said it will join PCCW Chairman Richard Li to offer as much as HK$14.9 billion ($1.9 billion) to buy out minority shareholders in the Hong Kong phone carrier.
On Oct. 15, Unicom paid 1.508 shares for each China Netcom share to acquire the country’s second-biggest fixed-line carrier. The transaction was valued at HK$123.9 billion based on stock prices on Oct. 14.
Tags: China-Netcom, China-Unicom, HK, PCCW