Telefonica | January 23, 2011 | Press Release
TELEFO?NICA AND CHINA UNICOM STRENGTHEN THEIR STRATEGIC ALLIANCE
AND AGREE A NEW MUTUAL INVESTMENT
• Telefo?nica and China Unicom deepen their Strategic Alliance
• Telefo?nica will increase its interest in China Unicom’s share capital to around 9.7%,
assuming current share prices, while China Unicom will increase its interest in
Telefo?nica’s share capital to 1.37%
Beijing/Madrid, 23rd January 2011 – Telefo?nica and China Unicom have agreed to enhance
their Strategic Alliance, and to deepen their cooperation in areas such as procurement, mobile
service platforms, services to MNCs, wholesale carriers, roaming, technology, among others,
where both companies have been cooperating since the signature of their Strategic Alliance
Agreement.
Additionally, Telefo?nica and China Unicom have strengthened their Strategic Alliance with a new
mutual investment pursuant to which the parties agreed to increase their respective stakes by
acquiring the equivalent of US$500 million in the other party through the purchase of each party’s
shares. China Unicom will raise its interest through the acquisition of 21,827,499 Telefo?nica
shares at an agreed value of 17.16 Euros per share. The criteria employed in determining the
share price was the arithmetic average of closing prices for the thirty consecutive trading days
ending on 14 January 2011, consistent with the criteria applied at the first share exchange
agreement entered into between Telefo?nica and China Unicom in 2009. In turn, Telefo?nica will
buy from third parties the China Unicom shares to be completed within the next 9 months. Once
completed, Telefo?nica will increase its interest in China Unicom to around 9.7%, assuming current
share prices, and China Unicom will have a 1.37% stake in Telefo?nica.
Furthermore, the Board of Directors of Telefo?nica will propose at the next General Shareholders’
Meeting the appointment of a new member of the Board of Directors representing China Unicom.
The agreement signed today follows the one reached back in 2009, where the two companies
invested US$1 billion in the other party’s shares and entered into a Strategic Alliance Agreement.
The agreement was signed by the operators’ respective chairmen, Mr. Ce?sar Alierta and Mr. Chang
Xiaobing.
After the signing of the agreement, Telefo?nica’s Chairman Mr. Ce?sar Alierta emphasized that “we
are very pleased to further strengthen our relationship with China Unicom. With a combined
customer base of 590 million accesses, approximately 10% of the world’s population, this new
step in our strategic alliance reinforces our leadership position and provides us with an exceptional
springboard to continue to compete globally in the best conditions ever and jointly lead the new
digital world, benefiting both our shareholders and customers”.
Mr. Chang Xiaobing, Chairman of China Unicom, commented that “Since the signing of the
Strategic Alliance Agreement by China Unicom and Telefo?nica 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”.
About Telefo?nica
Telefo?nica is one of the world’s largest telecommunications companies by market cap. Its
activities are centred mainly on the fixed and mobile telephony businesses, while its broadband
business is the key growth driver underpinning both.
It operates in 25 countries and its customer base exceeds 280 million globally. Telefo?nica’s growth
strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin
America.
Telefo?nica is a 100% private company, with more than 1.5 million direct shareholders. Its share
capital consists of 4.563.996.485 ordinary shares traded on the continuous market on the
Spanish Stock Exchanges (Madrid, Barcelona, Bilbao and Valencia) and on those of London, Tokyo,
New York, Lima, Buenos Aires and Sa?o Paulo.
If you would like to know more about the Telefo?nica, please visit www.telefonica.com
About China Unicom
China Unicom (Hong Kong) Limited (“the Company”) was incorporated in Hong Kong in February
2000 and was listed on the New York Stock Exchange and the Stock Exchange of Hong Kong on
21 June 2000 and 22 June 2000 respectively. On 1 June 2001, the company was included as a
constituent stock of the Hang Seng Index.
At present, China Unicom is engaged in GSM and WCDMA cellular business in 31 provinces,
municipalities and autonomous regions in China, the provision of fixed-line voice, broadband and
other Internet-related services, information and communications technology services, business
and data communications services, and other related telecommunication value-added businesses.
