China Unicom and Telefónica have agreed on a $2 billion share swap – the first by a mainland carrier in a foreign telco.
Under the deal, signed in Beijing on Sunday, each carrier will invest $1 billion in the other.
Telefónica will increase its stake in China Unicom (Hong Kong) from 5.38% to above 8%, while the Chinese carrier will take an 0.88% share in the Telefónica.
Although Telefónica and SK Telecom have invested in China Unicom and UK giant Vodafone has taken a 2.5% share of China Mobile, it is the first time a Chinese operator has cross-invested in a foreign telco.
The two also signed a “strategic alliance” agreement covering joint acquisition of infrastructure and terminals, development of wireless service platforms, provision of services to multinational enterprises, roaming and R&D.
Telefónica chairman César Alierta said that the alliance offered a combined customer base of nearly 550 million.
“We are fully committed to the alliance and will exploit the synergies offered by this far-reaching cooperation to benefit our shareholders and customers alike,” he said.
Telefónica is Europe’s largest telco by market cap, with operations in 25 countries and more than 264 million customers.
Unicom is China’s second largest mobile operator, with 141 million mobile customers as well as 108 million fixed-line customers and 36 million broadband subs.