ADRs in Focus: China Unicom shares slide

Shares of China Unicom Ltd. trading on U.S. exchanges fell in Tuesday afternoon trading after the mobile phone company posted plans to take over a fixed-line provider and sell off a mobile business, news that led an analyst to cut his rating.

The company's ADRs fell $2.98, or 13.1 percent, to $19.81. ADR stands for American Depositary Receipt, which is a security designed to allow U.S. investors to trade shares of companies based overseas.

China Unicom said it will buy China Netcom Group Corp. Ltd. in a share swap valuing the fixed-line operator at 185 billion Hong Kong dollars ($23.8 billion).

Meanwhile, China Unicom and its parent said they would sell the code division multiple access, or CDMA, mobile network and accompanying business to China Telecom and its parent for 110 billion yuan ($15.86 billion).

Credit Suisse analyst Jeffrey Tan downgraded China Unicom to "Neutral" from "Outperform."

Tan said he had hoped the CDMA business would be sold at a premium, and that the company would have negotiated a better price for China Netcom.

The Bank of Asia ADR Index lost 2.14 points to 162.42. The Bank of New York Composite ADR Index fell 1.96 points to 181.08 as the U.S. markets slipped in afternoon trading.