China Unicom unveils $11.7bn of outside investment
Alibaba Group, Tencent, and Baidu among 12 names who will take a combined 35% share in state-owned China Unicom as part of a structural overhaul
China Unicom has unveiled plans to raise $11.7 billion in investment from 12 firms including tech giants Alibaba Group and Tencent Holdings.
The state-owned Chinese operator unveiled the much-rumoured structural overall, which is part of Beijing’s attempts to revitalise state-owned operations with outside investment.
China Unicom, which is the world’s fourth largest mobile operator by subscriber numbers, will issues shares worth around 35% of its Shanghai-listed unit, China United Network Communications, to investors also including Baidu, JD.com, and a number of executives. The investors will also be given three sears on the board.
"The mixed ownership will raise the innovation capability of the company ... allowing us to transform from a traditional operation to an integrated operator," said Lu Yimin, president of China Unicom Hong Kong.
China Unicom’s board has approved the move, with the deal expected to be completed by the end of the year. It will use the funds to invest in 4G, 5G trials, and other “related business functions”, it said in a presentation.
It also announced plans to introduce an employee incentive scheme as part of the reforms, in order to “attract and retain high calibre employees”. How this will be structured will be announced by the board “in due course”, but the scheme will be open to directors, senior management, management personnel, and key technical experts.
China Unicom made the announcement alongside its half year financial results, in which it saw revenue fall 1.5% to $20.6 billion. Profits for the six months ending June 30 jumped 70%, however, to $361 million.