China Mobile to pay $34 billion for parent networks

China Mobile (HK) Ltd., the world's fastest growing mobile phone company, agreed to pay $34 billion to acquire seven mobile phone networks from its parent, China Mobile Communications, a banker close to the transaction says. Vodafone Group, the world's biggest mobile phone company, agreed to take a stake of $2.5 billion.

Three quarters of the payment, or $25.5 billion, will be paid in the form of new shares to China Mobile Communications, which will thereby retain its 75% stake in Hong Kong-listed China Mobile. The company will issue an additional $4.1 billion new shares to the public. The new shares represent less than 10% of China Mobile's outstanding shares. The company will also issue $600 million in convertible bonds including a greenshoe, and take out a $1.4 billion syndicated loan in yuan.