Chinese telecoms reorg $36B in tower assets into new company

China Unicom will sell 155.67 billion yuan worth of assets and, in turn, receive 37.74 billion shares and cash for the rest.

Meanwhile China Reform Holdings – an entity controlled by the government’s State-owned Assets Supervision and Administration Commission (SASAC) – will take a 6% stake.

All three operators are to sell their assets at appraised values “which represent premiums to book values of 20 per cent for China Mobile, 18.1 per cent for Unicom and 17.6 per cent for China Telecom”, Anand Ramachandran, the head of Barclays’ telecommunications, internet and media equity research for Asia, excluding Japan, said in a report. Subject to a final agreement on the lease terms, the transaction is expected to close by the end of October.

China Tower was established by China Unicom, China Mobile Ltd and China Telecom in 2014 to centralise construction and operation of telecom tower resources.

Canadian auto parts manufacturer Linamar Corp is in talks to buy French peer Montupet in a deal that values the company at roughly 800 million euros ($915 million), two sources familiar with the matter said on Wednesday.

China Tower is following the footsteps of Indus Towers, a three-way joint venture among Bharti Airtel, Vodafone India and Idea Cellular, three leading GSM telecom network operators in India.

China Mobile Ltd., according to a statement. Unicom’s assets were worth 63.2 billion yuan, while those from China Telecom cost US$34.3 billion yuan. Ltd. and China Telecom Corp. will each have about 28 percent.