BEIJING—France’s telecom giant Alcatel has raised its stake in its Shanghai Bell joint venture from 31.65 percent to 50 percent plus one share by purchasing 8.35 percent of total shares from the Belgian government’s Fund for Development Cooperation and an additional 10 percent plus one share from the Chinese partner in the venture. Alcatel will pay a total of US$312 million in cash for the two transactions.
Shanghai Bell will no longer be a Sino-Belgian joint venture, but a majority foreign-owned company. Shanghai Bell was established in 1983 by Bell Telephone of Belgium, at that time a subsidiary of ITT, which was later acquired by Alcatel.
Shanghai Bell, as well as Alcatel China and mobile equipment manufacturer Shanghai Bell Alcatel Mobile Communications will be integrated into Alcatel Shanghai Bell (ASB), which was set up in Beijing on 23 October. It is structured as a company limited by shares, which is required to be able to list on the Shanghai stock exchange. No decision to list has been made so far, but ASB becomes the first majority-owned foreign telecom company in China ready to be listed.
As part of the deal, ASB will become one of Alcatel’s major research and development (R&D) centers and more than double the number of its engineers to 3,500 in three years.
ASB expects to have sales of US$2 billion in the first year of operation. Alcatel’s other telecom ventures in China will also be integrated into ASB within 24 months after its establishment.
