China Netcom, Unicom merge, publish results

China Netcom yesterday finalised the merger with China Unicom, and posted the company's last ever financial results as a single entity.

As part of the merger, China Netcom has delisted from the Hong Kong stock exchange (HKSE) and the New York stock exchange (NYSE).

The company's shares have been swapped with China Unicom shares at a 1.5:1 ratio for the shares that had been listed on the HKSE, and a 3:1 ratio for the NYSE shares.

According to China Daily, the trade value of the deal is around $24 billion, making this the country's biggest merger in history.

The merger has so far had a less-than-stellar effect on China Unicom's share price, which dropped 3.65% to $1.65 by close of trading yesterday.

Meanwhile, China Netcom yesterday reported its results for the first three quarters of 2008.

Netcom took in RMB60.6 billion ($8.8 billion) in revenue over the period, a slight 1.8% decrease over the previous year's results.

The company added over 5 million broadband subscribers, to reach 24.8 billion. This represents a year-on-year growth of over 35%.

But it found its long-time cash-cow under threat - Netcom lost 3.4 million subscribers to its traditional voice services, with a particular decline in subscribers to its fixed-line services.

In other news, Netcom is rumoured to be part of a ploy to privatise PCCW - a company in which Netcom already owns a significant stake.

Quoting an anonymous source, the South China Morning Post is reporting that PCCW chairman Ricard Li, in conjunction with China Netcom, are planning to buy up the remaining PCCW shares and delist the company.

Li and Netcom together hold a majority stake in PCCW, and want to take advantage of the company's low share-price, according to the Post.

The PCCW board has recommended a buy-out price of HK$6 ($0.77) per share, but fears Li and Netcom will submit a lower bid.

PCCW shares recently plunged to a nine-year low of $0.35, before settling at $0.37 at close of trading yesterday.

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