JD.com and Baidu will join other major Chinese technology companies to mutually invest almost $12 Billion in the Shanghai-listed division of China Unicom. The division is the feeblest of 3 big state-possessed telecoms companies, two sources having deep knowledge of this matter said to the media in an interview.
The decision is part of the drive of the Chinese government to revitalize state behemoths with private fund. Beijing summed up China Unicom in 2016 to a first consignment of state-possessed ventures to witness mixed-ownership improvement.
The carrier is broadly seen as inefficient, over-staffed, and slow to design important technologies. It already covers state-possessed China Telecom and China Mobile, and private companies have shifted ahead in designing big data services, mobile software, and cloud services.
Local media last month reported that Tencent Holdings and Alibaba Group Holdings would be amongst new sponsors adding a total of almost $10 Billion into Shanghai-listed unit of China Unicom, China United Network Communications Ltd.
That total is expected to increase to almost 80 Billion Yuan ($11.8 Billion), with JD.com putting in almost 5 Billion Yuan, and Baidu investing almost 10 Billion Yuan ($1.48 Billion). JD.com is the second largest e-commerce firm of the country, while Baidu is the biggest Internet search provider of China. One of the sources gave this information to the media in an interview.
The China Life Investment Holding Co. Ltd. will be the biggest new investor, with a 20 Billion Yuan commitment. On the other hand, China Unicom division is expected to lift 7 Billion Yuan from Alibaba and 15 Billion Yuan from Tencent. One of the sources gave this information to the media in an interview.
In general, it will be the biggest fund raising in the Asia Pacific region since initial public offering of insurer AIA Group in 2010, as per the sources having deep knowledge of this matter. Both sources refused to be named as the discussions are not public.