Telefonica and China Unicom have entered into a strategic alliance agreement under which each would invest $1 billion in the other party through the acquisition of shares.
The agreement would increase Telefonica’s shareholding in China Unicom to around 8% from 5.38%, and China Unicom’s shareholding in Telefonica will be around 0.88%.
In addition, the parties would cooperate in various business areas such as the joint acquisition of infrastructure and equipment for customers, joint development of wireless service platforms, joint provision of services to multinational enterprises, roaming, R&D, and joint development of strategic initiatives within the framework of network and technology development.
Cesar Alierta, chairman of 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. We are fully committed to the alliance and will exploit the synergies offered by this far-reaching cooperation to benefit our shareholders and customers alike, making us bigger and more diversified so we can continue to compete globally by offering convergent solutions and best practices”.
Chang Xiaobing, chairman of China Unicom, said: “We are looking forward to enhancing the partnership and achieving a win-win situation for both parties. We believe that the partnership will help improve our capacities to provide extensive telecommunication and information application services, and maximise shareholders’ return.”
