China Mobile Rumors

China Mobile and China Unicom acquisition rumors are running as hot as the Beijing weather these days--double 8s yesterday at the Forbidden City.

Two of the leaders in global mobile, China Mobile and China Unicom, are at the center of international M&A rumors. China Mobile (CHL) is looking to acquire British music company EMI for GBP 3.2billion through Terra Firma, a private equity firm in in the UK. I'm not sure of the corporate synergies which may exist between a global music company and a Chinese mobile operator, but lesser deals have come to pass.

Initial reports were that Terra Firma would buy EMI directly, but now it seems the deal was just a stalking horse for China Mobile. The reports indicate that EMI has tentatively accepted Terra Firma's acquisition proposal and has suggested its shareholders agree with this acquisition.

China Mobile has not made any comment on this news. Interesting item, but I don't see the fit or the story. And why use a British PE firm. China is awash with savvy investment bankers these days, I'm sure Chinese backed groups such as The Hina Group, or China Renaissance or others could do just as well.

China Unicom to Acquire APBW?
Hong Kong media report that China Unicom (CHU) is planning to acquire a stake in Asia Pacific Broadband Wireless Communication, the first 3G broadband wireless service provider in Taiwan, for NT$6 billion.

The report says that China Unicom (CHU) may raise funds through some investment institutions including Merrill Lynch for the acquisition of APBW, a member of Asia Pacific Telecom Group. However, due to the Chinese mainland authority's limit for mainland companies to invest in the Taiwan telecom industry, China Unicom may first purchase and manage APBW's broadband and then wholly acquire it in two years when government limitations are sunsetted.

It is problematic for China Unicom to acquire such a company as APBW, which has recently seen financial losses. How the Chinese government justifies the acquisition strategy is another matter? Seems like a long shot.

Asia Pacific Broadband Wireless Communication is Taiwan's first 3G broadband wireless service provider. Established in November 2001 US$471 million in capital, APBW won its 3G mobile operating license and successfully commercialized the first CDMA mobile service in Taiwan's in 2003.