Telefonica Increases its Stake in China Unicom and Vice Versa
Published on: 23rd Jan 2011
Note -- this news article is more than a year old.
China Unicom and Spain's Telefonica has announced a closer cooperation between the two existing partners, and that each company is buying USD500 million of shares in each other. Once completed, Telefonica 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 Telefonica.
The agreement follows the one reached back in 2009, where the two companies invested USD1 billion in the other party's shares and entered into a Strategic Alliance Agreement.
The two companies will also deepen their cooperation 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.
China Unicom will also be able to nominate a member to the board at Telefonica - subject to Telefonica shareholder approval. Telefonica's CEO/Chairman, Cesareo Alierta already sits on the board at China Unicom.
The latest agreement was signed by the operators' respective chairmen, Mr. Chang Xiaobing and Mr. Cesar Alierta.
After the signing of the agreement, Mr. Chang Xiaobing, Chairman of China Unicom, commented that, "Since the signing of the Strategic Alliance Agreement by China Unicom and Telefonica in September 2009, the strategic cooperation between the two parties has been fruitful and we are satisfied in this regard. On the basis of existing cooperation, both parties have decided to enhance our strategic alliance by further investing in each other's shares and deepening existing cooperation. We believe that the enhancement of strategic alliance will promote the competitive advantages of both parties and maximize shareholders' return."