Mobile operator China Unicom is to acquire its fixed-line counterpart China Netcom in a share swap worth about US$23.8 billion, the Wall Street Journal reported. The transaction comes as part of a long-awaited restructuring of China’s telecom industry that will also see China Unicom sell its CDMA network to China Telecom, the country’s other fixed-line operator, in a US$15.9 billion cash deal. According to announcements made by the companies on Monday, each existing China Netcom share will be exchanged for 1.508 new China Unicom shares. Meanwhile, each existing American depository share of China Netcom will be exchanged for 3.016 new China Unicom American depository shares. China Unicom Chairman Chang Xiaobing said he expected the acquisition to be completed by the end of 2008. Chang’s counterpart at China Telecom, Wang Xiaochu, wants to take over Unicom’s CDMA network by the end of September and begin offering mobile services a month later.
For an in-depth look at the implications of China’s telecom industry restructuring, please refer to our April cover story.