China Unicom said Wednesday it plans to spend 12.17 billion yuan ($1.95 billion) to acquire domestic fixed network assets from parent in mainland China.
The company agrees to buy 100% share in Unicom New Horizon from its parent, China United Network Communications Group Company Limited (Unicom Group).
Unicom New Horizon owns fixed-line network assets in 21 provinces and cities in southern China.
China Unicom, the Hong Kong listed arm of the country’s No.2 telco, has been renting the fixed line networks from Unicom New Horizon since 2008, and the lease agreement is due to expire at the end of December.
The acquisition, pending approvals from China Unicom shareholders and government authorities in China, is expected to be completed before December 31.
Upon the completion of the deal, all of Unicom Group’s nationwide fixed-line business and assets will be integrated into China Unicom.
This would facilitate the listed arm’s integrated planning and management of the fixed-line network assets and business and enhance the operational and management efficiency, the company said.
For the nine months ended September 30, the audited net profit before tax and the audited net profit after tax of Unicom New Horizon were approximately 348 million yuan and 1.161 billion yuan, respectively.
Additionally, China Unicom has appointed Fanny Law Fan Chiu-fun as an independent non-executive director, as well as a member of the audit committee, with effect from November 21.