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China Netcom, China Unicom merger completed

(Xinhua)
Updated: 2008-10-15 22:22

China Netcom Group Corporation (Hong Kong) Limited was fully incorporated into China Unicom Limited in Beijing on Wednesday, creating the new China Unicom (Hong Kong) Limited.

Netcom's shares on the Hong Kong Stock Exchange and its American Depositary Shares (ADS) on the New York Stock Exchange were delisted.

The merger marked the end of the country's telecom restructuring in the capital market since numerous ministries jointly decided in May to restructure the telecom industry.

The deal involved a share swap of 1.508 new Unicom shares for every Netcom share, and 3.016 new Unicom ADS for every Netcom ADS, according to the August agreement by the two companies.

The merger was also the country's biggest, as the trade value stood at $24 billion.

After the merger, Netcom's logo on its Beijing head office would be changed on Thursday, and the building would be the new Unicom headquarter.

After the merger, the Netcom brand would gradually fade away from public view, with Unicom's fresh-red Chinese knot icon replacing it.

China Unicom and China Netcom held about 260 million subscribers through June, including 128 million GSM users, 109 million fixed-line phone users and 23.36 million broadband subscribers.

The new company will integrate wireless and fixed-line services. It will also use the present resources of the two firms to reinforce the construction of broadband networks and accelerate and improve the construction of the mobile communications and 3G networks.

By far, China United Telecommunications Corporation, the parent of China Unicom Limited, has sold its CDMA network to China Telecommunications Corporation (Telecom Group), parent of China Telecom. Around 20,000 employees have been transferred to the Telecom Group, and the main operation body of CDMA has changed from Unicom Group to Telecom Group since October 1.

The country's telecom restructuring had brought about three market contenders, in which Telecom, China Mobile and the new Unicom would compete, each with fixed-line and mobile services.

China Unicom shares dropped 3.65 percent to 11.60 yuan ($1.69) in Hong Kong on Wednesday.