China Unicom and Spain-based Telefonica SA will buy US$500 million worth of shares in each other to boost their stakes and raise cooperation between two telecommunications giants in China and Europe, the companies said Monday.
Telefonica agreed to increase its stake in China Unicom, Apple's sole partner for the iPhone, to about 9.7 percent while China's No. 2 telco aims to boost its holding in Telefonica to 1.37 percent, according to their joint statement. The higher stake will help China Unicom get a representative position on the Spanish telco's board.
Each company will buy US$500 million of shares in the other, with China Unicom paying Telefonica 17.16 euros (US$23) for each share. Telefonica will buy China Unicom shares from third parties over the next nine months.
China Unicom's Shanghai-listed shares grew 1.58 percent to close at 5.78 yuan (88 US cents), compared with the 0.72 percent drop in the key Shanghai Composite Index Monday.
In December, China Unicom was reported to have added 1.28 million 3G users which raised its total number of 3G users to 14.06 million last year due to booming sales of iPhone 4 since the phone debuted in the domestic market in September.
China Unicom is expected to attract 30 million new 3G users this year, according to China International Capital Corp, which rated the company "Overweight."
