China Netcom's shareholders have passed the resolutions to a conditional sale and purchase agreement for the company to acquire telecommunication businesses in northern China.
Under the agreement, China Netcom will acquire from China Netcom Group Corporation (BVI) Limited its telecommunication businesses in Heilongjiang Province, Jilin Province, Inner Mongolia Autonomous Region and Shanxi Province at a purchase price of CNY12.8 billion.
The company in northern China is the dominant provider of fixed-line telephone services, broadband and other Internet-related services, and business and data communications services in its regions. After excluding upfront connection fees, its revenues amounted to CNY17.6 billion and CNY9.3 billion respectively for 2004 and the first half of 2005 and operating profit was CNY1.1 billion and CNY1.8 billion respectively.
China Netcom expects to complete the acquisition on October 31, 2005.