Chinese internet search provider Baidu and e-commerce company JD.com, and other Chinese technology companies will jointly invest nearly USD 12 billion in state-owned operator China Unicom, Reuters reports, citing two unnamed people with direct knowledge of the matter. Back in July, press reports claimed Alibaba and Tencent would be among the new investors putting around USD 10 billion into China United Network Communications, a China Unicom unit.
That total is expected to reach CNY 80 billion (approximately USD 11.8 billion). Baidu is expected to contribute CNY 10 billion (USD 1.48 billion), while JD.com will invest around CNY 5 billion, one of the sources also said.
The China Unicom unit is expected to raise CNY 15 billion from Tencent and CNY 7 billion from Alibaba, while China Life Investment would be the biggest new investor, with a CNY 20 billion commitment, that source added.
The majority of the capital is expected to be raised through new share issues, while China Unicom would also sell part of its stake in the Shanghai unit, the two people said.
Baidu and JD.com declined to comment, and China Unicom, Alibaba and Tencent did not respond to requests for comment.
Following the share sale, China Unicom's stake in the Shanghai-listed business would drop to 40 percent, from the current 63 percent, one of the sources said. Top investors China Life Investment and Tencent would likely have seats on the company’s board to participate in its operations and improve its management. The share sale is scheduled for completion by end-August.
China Unicom said in a statement that it recently received approval from the National Development and Reform Commission to go ahead with a mixed ownership plan, including a non-public share issue to investors. Several ministries still need to approve the plan, and Unicom is still in negotiations with the potential investors, it said. The company acknowledged the media reports, but declined to name the investors.
