China Unicom, Netcom and Telcom in $56 B Deal

123jump.com Staff
02 Jun, 2008
New York City

China Unicom Ltd. proposed to acquire China Netcom Group Corp. for HK 187 billion or $24 billion. The second largest mobile carrier, China Unicom will also sell its smaller CDMA mobile network to China Telecom Corp for 66.2 billion or $8.8 billion in cash and sell its operations and subscriber lists for 43.8 billion yuan or $5.6 billion to its Hong Kong listed subsidiary.

[R]9:30AM New York – Chinese telecom companies merge after the government mandate to restructure the industry from six companies to three companies.[/R]

Telecom companies in China announced a plan to trade their mobile networks after the government mandated a plan to restructure the industry ahead of the sale of 3G wireless license.

China Unicom Ltd. proposed to acquire China Netcom Group Corp. for HK 187 billion or $24 billion. The second largest mobile carrier, China Unicom will also sell its smaller CDMA mobile network to China Telecom Corp for 66.2 billion or $8.8 billion in cash and sell its operations and subscriber lists for 43.8 billion yuan or $5.6 billion to its Hong Kong listed subsidiary.

Chinese government hopes that after the consolidation from six telecom companies to three, service will improve and market will have healthy competition.

China Netcom will be delisted after the acquisition and shareholders will receive 1.508 of new China Unicom shares. The deal price and stock swap is agreed based on the closing prices on May 23 and the deal is expected to close before the end of the year.

China Unicom will sell its CDMA network to China Telecommunication Corp. The network has 42 million subscribers and is the only CDMA network in the country.

Exports from India soared 31.5% to $14.4 billion and imports in the month surged 36.6% to $24.3 billion. Rising crude oil prices continue to drive the oil import bill higher. India imported $8.02 billion, a rise of 46% from a year ago as crude oil prices surge nearly 70% in the period. Trade deficit in the month surged to a record high of $9.8 billion. Rupee against dollar has fallen 7.5% in the last three months helping the exports. For the fiscal 2009 trade deficit is expected to rise to 9%.

In Tokyo Nikkei 225 Index closed higher 101.60 or 0.71% to 14,440.14, in Hong Kong Hang Seng index increased 298.24 or 1.22% closed to 24,831.36. In Australia ASX 200 index higher 7.60 or 0.13% to close 5,662.30. In Malaysia KL Composite index decreased 13.61 or 1.07% closed to 1,262.49.

In South Korea Kospi Index decreased 4.49 or 0.24% to close at 1,847.53, in Thailand SET index closed lower 23.43 or 2.81% to 810.22 and Indonesia JSE Index edged decreased 16.58 or 0.68% to 2,427.77. Sensex index in India decreased 352.39 or 2.15% to 16,063.18.