BEIJING—China Mobile (HK), listed on the Hong Kong and New York stock exchanges, is negotiating the purchase of eight provincial mobile-phone networks from its parent China Mobile Communications. The deal may be worth $13 billion.
China Mobile (HK) may be one of the first companies to issue China Depository Receipts. As a Hong Kong registered company listed on the local bourse, Chinese mainland investors are not legally allowed to buy its stock. Issuing CDRs would make it possible for those investors to put their money in China Mobile (HK). The company is also considering a bond issue to partly finance the acquisition.
China Mobile (HK) already has 13 provincial networks with around 65 million subscribers. Its parent has 18 networks with around 35 million subscribers. The eight networks to be transferred are those in Anhui, Chongqing, Hubei, Hunan, Jiangxi, Shaanxi, Shanxi and Sichuan. If the deal goes ahead, parent China Mobile would be left with just 10 networks with 15 million subscribers.
