China Unicom and China Telecom to Sign a Merging Contract

Published By : 02 Sep 2015 | Published By : QYRESEARCH

China is pushing many of the listed companies to restructure and merge as the government is planning to prevent a stock collapse and encourage the investors to return to their respective markets. As per the recent reports published by four government agencies, China is planning to encourage acquisitions and mergers to assist the listed firms to inject energy in the economy. The notice presented by four government agencies also stressed on different measures to lift the stock market. Firms will be encouraged to pay cash dividends in order to optimize the returns of the investors. Steps will also be taken to encourage the investors to hold their stock for a longer period. Finally, the companies will be advised to buy their respective stock, which would be priced high in the future.  

Last year, China announced to combine their two primary train makers, namely, the state owned China CNR Corporation and CSR Corporation in to a single conglomerate. The market recently speculated merging plans between key players of the sectors such as telecommunications, energy, and shipping. According to the Bloomberg news, Beijing is planning to merge its two giant companies from the telecommunication and wireless sector. As per the recent speculation, China Unicom and China Telecom are planning to be merged as the Chinese government swapped the chairmen of the two companies. The merging directive is a result of the recent stock market crash. Global market has swung widely considering the fear of slow growth in the second largest economy, China.

China is planning to simplify the approval process of acquisitions and mergers and expand different ways for the companies to fund their deals. China’s banking sector will offer financial support to the companies and cross-border mergers. The Assets Supervision and Administration Commission considered merging scores of some of the leading enterprises to create 40 national champions from the 111 existing ones. 
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