The original version of this story has been updated to note the role of Sullivan & Cromwell.
U.S.- and Hong Kong-listed China Telecom has a large fixed-line business but the smallest mobile division of China’s large state-owned telecom carriers, which include
China Mobile Ltd.
China Unicom Ltd.
The acquisition will give the company direct control over future network investment decisions and allow it to better integrate its service offerings.
China Telecom currently leases bandwidth from its parent; incurring a cost which would have increased with its subscriber base. China Telecom is banking on growth via a deal it signed with
earlier this year to offer the iPhone 4S.
The deal is subject to regulatory and shareholder approvals, and is expected to close by the end of 2012.
Sullivan & Cromwell Hong Kong partner Chun Wei is advising China Telecom on U.S. law. A Freshfields team, which includes Beijing partner Richard Wang and is being led by Hong Kong-based China chairwoman Teresa Ko is acting on Hong Kong law The two firms were also advisers to China Telecom Corp. on its $3.7 billion dual-listing on the Hong Kong Stock Exchange and the New York Stock Exchange in 2002.
Jingtian & Gongcheng is China Telecom’s Chinese counsel.