Spain's Telefonica sells Unicom stake for $1.4B

Spanish phone company Telefonica is selling about half its stake in China Unicom back to the Chinese state-owned phone carrier for 11 billion Hong Kong dollars ($1.4 billion).

Unicom said Sunday it had agreed to buy about 1.1 billion shares from Telefonica at HK$10.21 a share. The shares represent a 4.56 percent stake. After the deal, Telefonica will still own 5 percent of Unicom, whose shares are traded in Hong Kong.

The deal is expected to close by the end of July.

Telefonica's first-quarter profit plunged 54 percent, in large part due to a write-down of the value of an investment in Italy.

China Unicom Ltd. is one of the country's three major state-owned phone carriers.