Telefonica SA, Spain’s largest telecommunications company by market value, said Sunday it had reached an agreement with China Unicom to deepen their existing relationships, the Wall Street Journal reported. Telefonica will increase its stake in China Unicom to 8.06% from 5.38%, while Unicom will purchase shares worth up to 0.892% of Telefonica. Both companies will spend US$1 billion on the purchases. They also plan to cooperate on research and development, joint equipment purchases and joint service provision to multinational customers. Telefonica’s current stake in Unicom is derived from an earlier investment in China Netcom, which Unicom acquired earlier this year. The Spanish firm’s investment is its biggest outside its core markets in Europe and Latin America.