Telefonica is deepening its relationship with China Unicom, agreeing to buy up $500 million (€368 million) worth of shares in the carrier to extend its holding to 9.7%.
The share purchase will be reciprocated by China Unicom, which will snap up 21.8 million Telefonica shares for €17.16 each, as the pair seek to extend a strategic alliance covering procurement, mobile platforms, MNC services, wholesale, roaming and technology.
Unicom’s stake in the Spanish incumbent will total 1.37% once the transaction is completed, and Telefonica will propose adding a Unicom representative to its board.
The carrier’s chairman Cesar Alierta already has a seat on the Unicom board.
Alierta said the two companies share a combined customer base of 590 million people - roughly 10% of the world's population – and that the extended deal - “reinforces our leadership position.”
The agreement will help both firms to “jointly lead the new digital world,” Alierta added.
Telefonica and Unicom have been partners since 2009, when each invested $1 billion in the other.
The deal marked the first time a Chinese telco cross-invested in a foreign operator. Telefonica held over 5% of Unicom prior to the transaction.