Telefónica and China Unicom have each agreed to buy $500 million (approximately £312 million) of each other’s shares. This’ll give Telefónica around 9.7% of China Unicom and will give China Unicom a 1.37% stake in Telefónica.
They’ve also committed to working more closely in a number of areas.
The announcement follows a Strategic Alliance Agreement reached in 2009, when the two companies each invested $1 billion in the other one’s shares.
Mr Chang Xiaobing, Chairman of China Unicom, said “Since the signing of the Strategic Alliance Agreement by China Unicom and Telefónica in September 2009, the strategic cooperation between the two parties has been fruitful and we are satisfied in this regard. On the basis of existing cooperation, both parties have decided to enhance our strategic alliance by further investing in each other's shares and deepening existing cooperation. We believe that the enhancement of strategic alliance will promote the competitive advantages of both parties and maximize shareholders’ return”.
Telefonica and China Unicom have a combined customer base of 590 million, which represents approximately 10% of the world’s population. The O2 brand in the UK – along with O2 in Ireland, Germany, the Czech Republic and Slovakia – is part of the Telefonica group.