Saturday, January 22, 2011

China Unicom and Telefónica Strengthen Partnership

China Unicom and Telefónica will deepen their cooperation by investing the equivalent of US$500 million in the other party through the purchase of each party's shares. China Unicom will raise its interest through the acquisition of 21,827,499 Telefónica shares at an agreed value of 17.16 Euros per share. In turn, Telefonica will buy from third parties the China Unicom shares to be completed within the next 9 months.

Once completed, Telefónica will increase its interest in China Unicom to around 9.7%, assuming current share prices, and China Unicom will have a 1.37% stake in Telefónica .

The companies also agreed to collaborate in areas such as procurement, mobile service platforms, service to MNCs, wholesale carriers, roaming, technology, among others, where both companies have been cooperating since the signature of their Strategic Alliance Agreement.

Telefónica's Chairman Mr. Cesar Alierta emphasized that, "We are very pleased to further strengthen our relationship with China Unicom. With a combined customer base of 590 million accesses, approximately 10% of the world's population, this new step in our strategic alliance reinforces our leadership position and provides us with an exceptional springboard to continue to compete globally in the best conditions ever and jointly lead the new digital world, benefiting both our shareholders and customers."

Separately, China Unicom reported operational statistics. It ended 2010 with 153.366 million 2G subscribers, 14 million 3G subscribers and 47 million wireline broadband subscribers.
  • In 2009, China Unicom and Telefonica invested US$1 billion in the other party's shares and entered into a Strategic Alliance Agreement.