China Unicom, Telefonica complete US$1 bln share swap

Oct. 23, 2009 (China Knowledge) - China Unicom (Hong Kong) Ltd<600050><0762><CHU>, the country's second-largest telecom operator, Wednesday announced that it and Spain's Telefonica SA have completed a US$1-billion share swap.

Under the agreement, which was announced in September, the two companies exchanged US$1 billion in shares. Telefonica bought 693.91 million new shares in China Unicom at HK$11.17 each, while China Unicom took 40.73 million shares of Telefonica at EUR 17.24 apiece.

Telefonica increased its shareholding in China Unicom to 8.06% from the previous 5.38%, and China Unicom now holds about 0.87% in the Spanish company, the Chinese company yesterday said in a statement.

Chang Xiaobing, chairman of China Unicom, earlier said the partnership would improve the company's ability to provide telecom and information services and maximize shareholders' returns.

China Unicom's net profit dropped 42.1% year on year to RMB 6.62 billion in the first half of this year due to the company's restructuring and fierce competition. Revenues were RMB 76.32 billion in the first half.