UPDATE: Telefonica, China Unicom Deepen Strategic Alliance
September 06 2009 - 9:29AM
Dow Jones News
Telefonica SA (TEF) said Sunday it has reached an agreement to
deepen its strategic alliance with China Unicom (Hong Kong) Ltd.
(CHU), giving Spain's largest telecommunications operator by market
value a stronger foothold in the world's largest mobile telephony
market.
In a statement, Telefonica said it will increase its stake in
China Unicom to 8.06%, from 5.38% previously, and that China Unicom
will purchase shares equal to between 0.885% and 0.892% of
Telefonica.
The two companies will spend $1 billion each on the share
purchases.
In addition, they will cooperate in various areas including
research & development, joint purchasing of equipment and joint
service provision to multinational customers, Telefonica said.
"We are delighted with this alliance, which will bolster both of
our companies' leadership positions, giving us a combined global
customer base of nearly 550 million," Telefonica Chairman Cesar
Alierta said in the statement.
Telefonica had a 9.9% stake in China Netcom Group Corp. (Hong
Kong) Ltd. before this company was taken over by China Unicom
earlier this year.
Telefonica's bet on China represents its biggest investment
outside its core markets of Europe and Latin America. It has 264
million customers in 25 countries around the world. China Unicom
has 141 mobile telephony customers in China.
-By Jonathan House, Dow Jones Newswires; +34 619 93 39 52;
jonathan.house@dowjones.com