Chinese tech giants Alibaba Group Holdings and Tencent Holdings will be among new investors pouring a total of around $10 billion into mobile carrier China Unicom, sources said, part of efforts by Beijing to rejuvenate state behemoths with private cash.
Four sources with knowledge of the matter told Reuters that Alibaba and Tencent would invest in the Shanghai-listed unit of the telecoms group - China United Network Communications - as part of the capital-raising effort.
One of the sources said Alibaba and Tencent would lead the group of investors, while Baidu, the third of China's constellation of tech giants, has pulled out. The source did not comment on the reason for that decision.
China Unicom, formally known as China United Network Communications Group, plans to raise around 70 billion yuan ($10.25 billion) through the Shanghai unit, the sources said. That would mark the largest capital raising in Asia since the initial public offering of insurer AIA Group in 2010, according to Thomson Reuters data.
About 50 billion yuan would be raised through new share issues, while China's second-largest telecom carrier would also sell part of its stake in the Shanghai-listed unit, two of the sources said. The sources could not be identified as the negotiations are not public.
Other potential investors approached by China Unicom, named last year as part of a pilot mixed-ownership reform scheme, include the country's other major internet firms and some state-backed institutions, such as China Life Investment Holding, one of the sources said.
Alibaba, Tencent and other potential investors have yet to finalize the terms of any purchase, the sources said, though the deal is likely to be finalised by this summer.
China United Network did not respond to requests for comment. China Unicom Group and China Life Investment Holdings could not immediately be reached. Alibaba, Baidu and Tencent declined to comment.
The State-owned Assets Supervision and Administration Commission (SASAC), which oversees state-owned enterprises (SOEs), also did not respond to a request for comment.