TELECOM RESTRUCTURING TAKES FLIGHT

China Netcom has proposed a US$24 billion merger with China Unicom as part of a broader restructuring of China's telecommunications sector.

Under the proposal, holders of China Netcom shares and ADSs would receive China Unicom shares or ADSs with an aggregate value of HK$185 billion (US$23.8 billion), based on the most recent closing price of China Unicom shares. The transaction would close by the end of 2008 and would be subject to a number of customary closing conditions, including the approval of shareholders of both Netcom and Unicom and receipt of required regulatory approvals.