China Unicom, Netcom in 56-bln-dlr merger

Source from http://news.yahoo.com/s/afp/20080603/bs_afp/chinatelecommergerunicomnetcom

Wireless telecom provider China Unicom will take over fixed-line operator China Netcom in a share swap valued at 56 billion dollars, Unicom officials have said.

The combined firm will be an integrated company with a full range of product offerings, including mobile and fixed-line phone services, and broadband Internet, Unicom chairman and chief executive Chang Xiaobing told a press briefing.

Meanwhile, China Telecom said it would acquire China Unicom's CDMA business and network for 110 billion Chinese yuan (15 billion dollars).

Chang said the transaction should be completed in or by the fourth quarter of this year.

Unicom will offer 1.508 new shares for each existing ordinary share of Netcom and 3.016 American depositary shares for each American depositary share of Netcom.

Shareholders of both Unicom and Netcom are to meet in September to vote on the deal. Regulatory approval is also required.

China Netcom shares will be delisted upon completion of the merger.

The Chinese government and state press had said last week that China planned to create three telecom giants to bring balance back to an industry where mobile operators have prospered and fixed-line players lagged behind.

The players would include the merged China Unicom-Netcom, and China Telecom.

The third player would be the world's biggest mobile operator, China Mobile, which was to acquire fixed-line operator China Tietong Telecommunications Corp, the information industry ministry said previously.

The objective of the restructuring is to bring about three competitors of roughly comparable strength, the government has said.

It is also aimed at redressing the imbalance between rapidly growing mobile phone operations and the fixed-line business, which is actually seeing declines in subscriber numbers, it said.