China Unicom confirms Tencent, Alibaba as investors - Mobile World Live

China Unicom confirms Tencent, Alibaba as investors

16 AUG 2017

Tencent, Baidu, JD.com and Alibaba Group are among 14 strategic investors due to participate in a CNY78 billion ($11.7 billion) China Unicom share sale, the operator announced.

The companies will purchase 10.9 billion shares, which equates to a 35 per cent stake in state-owned China United Network Communications (referred to as Unicom A Share Company) at a price of CNY6.80 per share. Employees will also have the opportunity to purchase 850 million shares at a discounted price.

China Unicom’s announcement draws a line under recent speculation the operator was seeking investors as part of a broader government programme to reform ownership structures and rejuvenate state behemoths with private capital.

It marks the biggest deal in recent years under Beijing’s “mixed-ownership” reforms.

In a statement, the operator said the funds will be used to upgrade 4G capabilities, develop 5G related technologies, launch 5G trial programmes and “develop innovative businesses” to enhance “the core competiveness of Unicom A Share Company and speed up its strategic transformation.”

China Unicom said the business conducted by the leading internet companies, along with other investors including Didi Chuxing and Suning Commerce Group, “are highly correlated to, and complementary with” its principal businesses.

Another factor is the investors have “strong fundamentals” which will create “a powerful alliance”, it stated.

Mainland China’s second largest mobile operator said key areas for cooperation include big data, payment and internet finance, IoT, content aggregation and cloud computing.

Earlier in the week trading of the Chinese operator’s shares on the Hong Kong Stock Exchange was halted “pending the release of an announcement containing inside information”.

Last week the operator said the initial stages of establishing e-commerce operating centres with Tencent and Alibaba had nothing to do with the government’s mixed-ownership reforms.

Along with this announcement, the operator also confirmed it saw a 70 per cent jump in first-half profit and a 1.5 percent dip in revenue, as forecast earlier in the week.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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