Merger to form HK$439b telecoms giant in mainland revamp
China Unicom, the smaller of the nation's two mobile-telephone operators, will take over smaller fixed-line operator China Netcom Group Corp in a share swap valued at up to HK$182.77 billion, the companies announced yesterday.
The transactions between the Hong Kong-listed companies are a direct result of the central government's attempt to restructure the telecommunications industry into three full-service operators.
Unicom will swap one Netcom share for every 1.508 of its own shares, resulting in 10.1 billion new Unicom shares being issued.
The reference acquisition price is HK$26.78 per Netcom share, based on Unicom's latest market price of HK$17.76, which represents a 4.36 per cent premium over Netcom's last traded price of HK$25.66.
'It's a little bit disappointing that no cash is involved in the deal,' said Kelvin Ho, an analyst at Nomura International. 'The share prices of both companies will be linked in the market under the share-swap arrangement.'