Vodafone sheds China Mobile stake for $6.5bn
Vodafone has sold its 3.2 per cent stake in China Mobile for $6.5bn, nearly double what it paid.
The deal values the Chinese mobile operator at just over $200bn.
The sale was part of Vodafone's new strategy to sell off minority investments that don't have the strategic value to the company. Vodafone still has minority stakes in operators in Poland, France and India.
Analysts welcomed the disposal, which came earlier than expected, but said the announcement may focus investors attention on other assets such as the 44 per cent holding in France's SFR and the 45 per cent stake in Verizon Wireless.
Both of those will be harder to sell because there is only one buyer in each case.
Despite China's position as the world's biggest mobile market with nearly 800 million subscribers, growth for China Mobile and its rivals, China Unicom and China Telecom, has been slowing as revenue from voice calls declines amid increasing cellphone penetration.
"China Mobile and Vodafone have established close co-operation in business and technology areas since 2000. Both side will continue to cooperate in these areas in the future," China Mobile said in a statement.
"China Mobile's prospects depend on when it is going to get a go-ahead for LTE," said Eric Wen, an analyst at Mirae Asset Securities. Analysts believe that shifting to LTE, the next generation mobile network standard, could cut operating and expansion costs.