Spain's Telefonica said on Sunday that it had reached a deal with China Unicom whereby each would buy $1 billion worth of each other's shares as part of a strategic alliance.
The Spanish telecoms company said in a regulatory statement that its stake in Unicom would rise to about 8.06 percent, while Unicom would hold between 0.885 and 0.892 percent of Telefonica.
Under the terms of the deal, Telefonica will buy 693,912,264 new shares in China Unicom at HK$11.17 each.
China Unicom has agreed to buy 40,730,735 of Telefonica shares at 17.24 euros each. Telefonica closed on Friday at 17.38 euros, up 1.02 percent on the day.
Telefonica said each company would either pay for the new shares issued by the other in cash, or Telefonica would pay for new shares in Unicom with its own shares.
The two companies have agreed not to issue, offer or sell a significant number of shares to any of their leading competitors, or to make significant investments in key rivals.