Mobile operator China Unicom is looking to acquire fixed line assets from its state-owned parent company Unicom Group for Yn12.17bn (US$2bn).
Unicom New Horizon, a wholly owned subsidiary of Unicom Group, currently owns the company’s fixed line assets…
Mobile operator China Unicom is looking to acquire fixed line assets from its state-owned parent company Unicom Group for Yn12.17bn (US$2bn).
Unicom New Horizon, a wholly owned subsidiary of Unicom Group, currently owns the company’s fixed line assets which cover 21 provinces and cities in Southern China.
In a statement to the Hong Kong stock exchange today, China Unicom said the depreciation and amortisation costs of the fixed line assets have been lower than the network lease fee it pays its parent company, so the proposed acquisition would increase the company’s earnings.
China International Capital Corporation Limited (CICC) is advising China Unicom on the proposed deal and Rothschild is advising the mobile carrier’s board and shareholders.
The date for an EGM for shareholders to approve the acquisition will be set by 29 November.
China Unicom is not the only mobile operator in the country looking to eliminate lease fees. As TelecomFinance reported back in August, China Telecom said it would buy the CDMA network held by its parent company for an initial consideration of Yn84.6bn (US$13.3bn), in order to eliminate “the rapidly rising lease fee to significantly improve EBITDA”.
