Freshfields and Sullivan on call for China Telecom’s $13bn asset buy

Freshfields Bruckhaus Deringer and Sullivan & Cromwell have joined Chinese firm Jingtian & Gongcheng advising Hong Kong-listed China Telecom Corporation on its $13.4bn (£8.5bn) acquisition of 3G network infrastructure from its parent company.

Teresa Ko
Teresa Ko

Through the acquisition, China Telecom will purchase certain code division multiple access (CDMA) network assets owned by the parent China Telecommunications Corporation which it currently leases, including 2G/3G CDMA infrastructure covering 30 provinces, municipalities and regions in China.

Beijing-headquartered Jingtian, a longstanding PRC legal adviser to China Telecom, advised the buyer. The firm’s transaction team was headed by relationship partner Shuai Tianlong. All of the assets acquired are based in China.

China Telecom, which is listed on both the Hong Kong Stock Exchange and the New York Stock Exchange, engaged Freshfields and Sullivan as its Hong Kong and US adviser respectively.

The Freshfields team was led by Hong Kong-based China chair Teresa Ko and Beijing corporate partner Richard Wang, while Sullivan’s team was led by Hong Kong partner and China head Chun Wei.

The transaction is expected to be completed by 31 December this year, subject to certain conditions being fulfilled, including regulatory and shareholder approvals.

Background to this deal:

Freshfields, Jingtian and Sullivan are all long-serving advisers to China Telecom. Tianlong, Ko and Wei are the relationship partners at the three respective firms.

In 2002, the three firms advised the company on its global listings on the Hong Kong and New York exchanges. In 2008, as part of a major restructuring in China’s telecommunications sector, China Telecom and its parent bought the CDMA network from China Unicom for $15.8bn. In that transaction, Jingtian joined forces with Linklaters to advise the acquirers, while Freshfields and Sullivan were advisers to China Unicom.

In addition to the CDMA deal, Linklaters also acted as international legal counsel to China Netcom Group on its US$23.8 billion merger with China Unicom as part of the 2008 sector restructuring.

Linklaters’ China Telecom team was led by Beijing partner Paul Chow, who joined Davis Polk & Wardwell in 2010 (29 November 2010). The firm’s China Netcom team was led by Beijing partners Celia Lam, who left for Simpson Thatcher & Bartlett in 2011 (3 May 2011).