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Funds generated from a share sale conducted by China Unicom is estimated to earn the operator around $11.7 billion, which it will subsequently utilize to upgrade its 4G capabilities and help accelerate its aims to develop 5G related technology.

Chinese search engine colossus Baidu and e-commerce giant Alibaba Group are amongst a consortium of 14 strategic investors who are expected to participate in the China Unicom share sale, according to a statement released by the Chinese operator.

It has been disclosed that the companies will purchase 10.9 billion shares, which will equate to about a 35% stake in the state-owned operator. In addition to this, it has been further disclosed that the share price will be CYN 6.80, although employees will be given the opportunity to purchase 850 million shares at a discounted price.

The statement released by China Unicom finally brings an end to months of speculation that the operator wanted investment as part of a broader government scheme to reform ownership structures and rejuvenate state behemoths with private capital.  This share sale represents the largest deal in recent years under Beijing’s ‘mixed-ownership’ reforms.

China Unicom aims to use the investment generated by the share sale to not only upgrade its existing 4G capabilities and develop 5G technology, but also to launch 5G trial programs and to develop innovative businesses aimed to enhance the core competitiveness of the entire organization.

In addition to this, China Unicom said that the investors selected for the share sale all possess ‘strong fundamentals’ that will ultimately ensure a ‘powerful alliance’ will be created. The Chinese operator claimed that the key areas for cooperation include big data, payment and internet finance, Internet of Things and cloud computing.

Trading on China Unicom’s shares on the Hong Kong Stock Exchange were halted earlier this week, due to the pending release of an announcement containing inside information. The Chinese state-owned operator insisted that the initial stages of establishing e-commerce centers with Tencent and Alibaba had nothing to do with the government’s mixed-ownership reforms.

Its latest financial results made for positive reading for shareholders with the operator enjoying a 70% increase in first-half profit, although there was a 1.5% dip in revenue.

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