Spanish incumbent Telefonica and Chinese mobile operator China Unicom have announced they will deepen their strategic partnership with a new mutual investment.
The companies said they would buy an additional US$500m stake in each other, raising…
Spanish incumbent Telefonica and Chinese mobile operator China Unicom have announced they will deepen their strategic partnership with a new mutual investment.
The companies said they would buy an additional US$500m stake in each other, raising Telefonica’s stake in China Unicom to 9.7% and China Unicom’s ownership of Telefonica to 1.37%. China Unicom will buy 21.83 million of Telefonica treasury shares at E17.16 per share, while Telefonica will acquire China Unicom shares in the market over the coming nine months.
This agreement follows a similar one signed in 2009, where the two companies invested US$1bn in each other.
The statement also explained that Telefonica’s board would propose, at the next general shareholder meeting, the appointment of a new director representing China Unicom. Through this strategic alliance, Telefonica and China Unicom are reportedly looking to make joint investments in Asian, Latin American and African countries where they are not already present.
Telefonica’s chairman Cesar Alierta said in statement: “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.”
This agreement between the two companies contrasts with Vodafone selling its 3.2% stake in China Mobile for £4.3bn, back in September, in order to return money and therefore calm investors.
