China Unicom shares rose slightly yesterday after the country's second biggest wireless carrier and Spanish telecom firm Telefonica agreed to swap US$1 billion stocks among each other to cement their tie-up.

Under an agreement announced over the weekend, the two telecom carriers will each buy US$1 billion worth of other's shares to "strengthen their cooperation and achieve business synergy".

Telefonica, Spain's largest telecom operator, which already owns about 5.38 percent of Unicom, will boost its shares in the Chinese firm to 8 percent, according to the agreement.

China Unicom will hold nearly 0.9 percent of Telefonica after the share purchase.

China Unicom shares edged up 1.09 percent to close at 6.5 yuan in Shanghai, after rising as much as 3.27 percent. Its Hong Kong-listed shares climbed 2.98 percent to close at HK$11.06.

China Unicom and Telefonica said they would cooperate in areas such as infrastructure and equipment sharing, R&D and roaming services.

Under the deal, which the two telecom operators said will give each other the access to a combined 550 million customers worldwide, managers from both companies will also participate in an exchange program.

Goldman Sachs said yesterday in a research note that the deal would not bring substantial impact on China Unicom.

(China Daily September 8, 2009)