HONG KONG, June 2 (Xinhua) -- Mainland-based
telecommunications giants China Unicom and China Netcom, both listed on the Hong
Kong stock exchange, announced Monday that each share of Netcom will be
exchanged for 1.508 Unicom shares in a proposed merger.
(L-R) China Netcom CFO Li Fushen, China
Netcom Chairman and CEO Zuo Xunsheng, China Unicom Chairman and CEO Chang
Xiaobing and China Unicom CFO Tong Jilu join hands after announcing the
merger of China Netcom and China Unicom in Hong Kong, South China, June 2,
2008. China Unicom also said it reached a framework agreement with China
Telecom under which China Telecom will buy CDMA business and CDMA network
from China Unicom Group. (Xinhua/Zhou Lei) Photo
Gallery>>>
The rate
was based on the price of China Netcom shares on the Hong Kong mainboard before
their suspension from trading on May 23, with a 3 percent premium, said
Tong Jilu, executive director and chief financial officer of China Unicom.
Chang Xiaobing, chairman and chief executive officer
of China Unicom, also said each American depository share of China Netcom will
be exchanged for 3.016 American depository shares of the new China Unicom,
subject to shareholders' approval.
The merger is expected to be completed in October
this year after the shareholders' conferences in September if everything went
ahead smoothly, Tong said.
The merged group, possibly bearing the name of China
Unicom, will have an enlarged capital of 23.76 billion shares, worth a total of
439.17 billion yuan (63.28 billion U.S. dollars). It is expected to be a
provider of integrated services including mobile and fixed-line
telecommunications, broadband, data and value-added services.
"The merger is in line with the trend of convergence
of fixed- line and mobile networks, and is expected to enable the merged group
to set clear strategy," Chang said, referring to the direction for the company
to pursue 3G strength.
China Unicom, currently one of the telecommunications
giants in the Chinese mainland, is a far second to the largest mobile carrier
China Mobile, while China Netcom is a provider of fixed line telecommunications
and broadband services.
The merger was currently between the Hong Kong-listed
China Unicom Limited and the China Netcom Group Corporation (Hong Kong) Limited,
but not a merger between their mother companies, Chang told a press conference
held in Hong Kong.
China Netcom will cease to exist as a listed firm
after the merger, subject to approval from the shareholders at the company's
annual conference, which is expected in September, said Zuo Xunsheng, chairman
and chief executive officer of China Netcom.
Shares of both companies will resume trading on Hong
Kong exchange on Tuesday.
The merger was part of a major regrouping in the
Chinese telecom industry aimed at more competition by forming three providers of
integrated services after regrouping.
State authorities issued an announcement on May 24,
saying that they "encouraged" a regrouping of the telecom corporations to form
three providers of integrated services to increase market competition. China
Mobile has recently announced a proposal to buy fixed-line operator China
Tietong, or Railway Telecommunications.
At a separate press conference in Hong Kong on
Monday, the HongKong listed China Telecom announced that it has reached an
agreement to buy the CDMA services of China Unicom, thus making it one of the
three integrated services providers, too.
China Unicom also announced at the conference that it
will sell its CDMA services at 43.8 billion yuan (6.31 billion U.S. dollars)and
that its mother firm China Unicom Group will sell its CDMA network at 66.2
billion yuan (9.54 billion U.S. dollars) to China Telecommunications
Corporation, the mother firm of China Telecom.
Speaking at a separate press conference in Hong Kong,
Wang Xiaochu, chairman and chief executive officer of China Telecom, said that
the deal is expected to be completed in October, subject to shareholder approval
at annual conferences in September.
China Telecom will pay for the transaction in cash,
Wang said, adding that he expected the CDMA part to contribute net profit as
early as 2012, although the deal could impact the earnings record of the company
in short term.
The regrouping will result in three separate
providers of integrated services, with most of the analysts saying that they
expected China Unicom to benefit the most from the regrouping whereas the
strength of China Mobile could be reduced.
Others, however, said they expected China Mobile to
remain the giant among the giants and retain most of its power in the mainland
telecom industry.
Chang, head of China Unicom, also warned against
"over optimism" about the increased strength of the merged company, saying it
required long-term effort.
HONG KONG, June
2 (Xinhua) -- China's fixed-line operator China Telecom announced Monday that it
will buy the CDMA services of China Unicom at 43.8 billion yuan (6.31 billion
U.S. dollars) to become an integrated service provider.
China Telecommunications Corporation, the mother firm of
China Telecom, will also buy infrastructural CDMA network from China Unicom
Group, the state-owned mother firm of the Hong Kong-listed China Unicom, the
company said in a statement. Full story
HONG KONG, June 2 (Xinhua) -- China's telecommunications giants China Unicom and
China Netcom, both listed on the Hong Kong stock exchange, announced Monday each
share of Netcom will be exchanged for 1.508 Unicom shares in a proposed merger.
The exchange rate was based on the price of China Netcom
shares on the Hong Kong mainboard before their suspension from trading on May
23, with a 3 percent premium, said Tong Jilu, executive director and chief
financial officer of China Unicom. Full story
BEIJING, June 2 (Xinhua)
-- More details of the long-anticipated China telecoms industry reshuffle were
revealed on Monday as China Unicom, the country's second largest mobile service
provider, said it would acquire fixed-line operator China Netcom Group Corp.
with a share swap deal.
The deal was valued at 439.17 billion Hong Kong
dollars (56.34 billion U.S. dollars), based on Monday's closing price of China
Unicom at 18.48 Hong Kong dollars per share. Full
story
