China Mobile subsidiary CM TieTong has agreed to buy assets from fixed-line sister company TieTong for Yn31.88bn (US$4.99bn) as it works to become a fully integrated fixed and mobile player.
China Mobile (SEHK:0941) subsidiary CM TieTong has agreed to buy assets from fixed-line sister company TieTong for Yn31.88bn (US$4.99bn).
The price may increase by up to Yn1bn (US$156.42m) in line with the terms of the acquisition agreement, the Chinese mobile giant said in a stock exchange filing. Adjustments may be driven by changes in the target’s working capital, capital expenditure, depreciation and liabilities, the operator explained. China Mobile and TieTong are both subsidiaries of state-owned China Mobile Communications Corporation (CMCC).
The deal will also see CM TieTong assume net debt of about Yn2.34bn (US$366.05m).
The assets to be acquired include about 99,000 cable kilometres of nationwide backbone network, about 1.82 million cable kilometres of metro fibre, about 24.7 million IPv4 addresses, and 1,814 real estate and 685 land assets. China Mobile will also acquire broadband and traditional fixed line customers and TieTong employees.
China Mobile said its board believes the deal will help accelerate its transformation into a fully integrated fixed-mobile player and “greatly reduce” the connected transactions between itself and TieTong parent CMCC.
UBS advised China Mobile on the transaction, which is expected to close on 31 December.
