With a 800 EUR investment in China Netcom Group Corp and China Unicom, Telefonica will own 5.5% of the new, merged company following the restructuring of China’s state-controlled telecommunications industry. Currently China represents the world’s largest mobile market and the 800 EUR investment would position the Spanish giant as the leading private shareholder of the company after expanding aggressively in Latin America and Europe.
Under terms of the deal agreed upon with New York-based asset management firm AllianceBernstein LP, Telefonica will acquire up to 5.74% of China Netcom Group in two tranches. The first will acquire 2.71 of China Netcom for about 368 EUR and then buy 3.03% of China Unicom’s shares after the two companies merge. The move is bold and with China adding 5.2 million wireless subscribers each month, carriers can expect huge growth in the coming years.
Source: Dow Jones Newswires
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