China Unicom has confirmed that Alibaba, Baidu, JD.com and Tencent are all taking part in its upcoming CNY78 billion ($11.7 billion) share sale.
A total of 14 companies are set to acquire 10.9 billion shares in Unicom - equivalent to a 35% stake – for CNY6.80 per share. In addition, 850 million shares will be made available to Unicom employees at a discounted price.
China’s National Development and Reform Commission has granted approval for Unicom to trial mixed ownership structures as part of a wider government initiative to encourage private investment in state enterprises.
This announcement finally quells speculation over whether Unicom would receive investment from any of the internet firms with which it had announced collaborations. The operator recently denied that its collaborations with Alibaba and Tencent on e-commerce operation centres amounted to a confirmation of investment.
Unicom stated that the additional investment would be used to improve its 4G offering, develop 5G technologies and begin 5G trials, and “develop innovative businesses” to improve “the core competiveness of Unicom A Share Company and speed up its strategic transformation.”
The investment announcement is perhaps the most significant development to have occurred as a result of the Chinese government’s push for “mixed-ownership”. Unicom has described its investors’ businesses as “highly correlated to, and complementary with” its own.
Unicom noted that it looks forward to a “powerful alliance” with the internet firms, along with its other investors including Didi Chuxing and Suning Commerce Group. It intends to focus on areas including big data, mobile and internet finance, cloud, and content aggregation.
The operator also stated that it had seen its H1 profits leap 70%, although its revenue for the same period dropped by 1.5%.
