China Unicom Ltd. said Thursday that Chairman and Chief Executive Chang Xiaobing will become chairman and CEO of the newly formed company that will emerge from its merger with China Netcom Group Corp. (Hong Kong) Ltd.

China Unicom said it expects the integration of the two companies to be completed within one year of the merger. In June, Mr. Chang said the company expects the merger deal to close by the end of 2008.

Wireless carrier China Unicom will merge with fixed-line operator China Netcom as part of the government-directed industry restructuring unveiled in May. The restructuring entails merging six of the country's state-owned mobile-phone and fixed-line operators into three nationwide carriers offering fixed-line and wireless services, instead of dividing coverage in terms of region or type of service.

"Globally, the telecommunications industry is moving towards the convergence of fixed-line and wireless services," Mr. Chang said in a statement. "By combining the resources and business strengths of Unicom and Netcom in different areas, and upon obtaining a license for 3G services, the merged company will aim to become a world-class provider of broadband communications and information services."

China Unicom said it expects the merged company to have more than 18,000 sales outlets and 170,000 wireless base stations. The company is expected to have 259 million subscribers, including 128 million GSM users, 109 million local-access users and 23.36 million broadband users, based on the companies' subscriber numberss as of June 30.

China Unicom said it will hold an extraordinary shareholders' meeting on Sept. 16 to seek minority shareholders' approval for the proposed merger. China Netcom's minority shareholders will meet on Sept. 17 to vote on the merger plan. After the merger, China Netcom will become a wholly owned unit of China Unicom. China Unicom said it proposes to change its name to China Unicom (Hong Kong) Ltd. once the merger is completed.

Separately, China Netcom said it plans to delist its shares from the Hong Kong stock exchange Oct. 15, following the planned merger with China Unicom. China Netcom said it also intends to withdraw its American depositary receipts from the New York Stock Exchange on Oct. 15. Under the proposed merger plan, each existing China Netcom share will be swapped for 1.508 new China Unicom shares, while each existing American depositary share of China Netcom will be swapped for 3.016 new China Unicom ADSs.

China Unicom said it plans to issue as many as 10.3 billion new shares for the transaction. Based on China Unicom's share price of HK$18.48 prior to a suspension of trading on May 23, the deal is valued at US$24 billion.

China Unicom said Wednesday it expects to invest 100 billion yuan (US$14.58 billion) in third-generation wireless services over the next two years. China Unicom said it expects to get a 3G license after it completes its merger with China Netcom. China's telecom regulator will issue three 3G licenses after the industry restructuring is completed.

source:THE WALL STREET JOURNAL