China Unicom buys fixed assets for 2B

22 Nov 2012

China Unicom is to acquire fixed-line assets from its state-controlled parent group, with the aim of more closely integrating its mobile and fixed networks in a bid to improve efficiencies and cut costs.

The Chinese number-two is to acquire 100 percent of Unicom New Horizon for CNY12.2 billion (US$2 billion) from the Unicom Group.

Unicom New Horizon operates a fixed network in 21 provinces and cities in southern China, which China Unicom currently leases. China Unicom already owns fixed-line assets in northern parts of the country.  

That deal comes to an end at the end of the year, and China Unicom said that future lease fee savings would exceed the “incremental depreciation, amortisation and financial costs” arising from the acquisition.

“The proposed acquisition would increase the earnings of China Unicom and be conducive to increasing the long-term value for China Unicom’s shareholders,” the Hong Kong-listed operator said in a statement.

It said that deal would also allow “integrated planning and management” across its networks and improve corporate governance.

The deal is expected to close on 31 December pending regulatory approvals.

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