China Netcom to Acquire Four Local Telecoms from Parent Company
September 16, 2005
China Netcom recently announced it will buy four regional phone operators from its unlisted parent company, China Network Communications Group, for 36 billion RMB, 12.8 billion RMB of which will be a cash payment, whereas the remaining 23.2 billion RMB is the amount of debt China Netcom will assume. The four operators are based in Jilin, Heilongjiang and Shanxi provinces, and in the Inner Mongolia Autonomous Region, and will add about 31.6 million new subscribers to China Netcom's operations. The company stated that the acquisition will increase profit this year from the originally forecasted 1.1 billion RMB to 1.4 billion RMB. In the past other large Chinese telecoms, such as China Telecom and China Unicom, have also acquired local companies from their parent companies.