BEIJING (BLOOMBERG) - Alibaba Group Holding is closing in on a deal to acquire Chinese telecommunications gear maker ZTE Corp's software subsidiary, an acquisition that could help strengthen its global Internet computing business, people familiar with the deal said.
China's leading e-commerce operator has been in negotiations to buy ZTEsoft Technology for months and is nearing an agreement, according to one of the people, who asked not to be identified, discussing a private deal. Alibaba could pay between 2 billion yuan (S$407.7 million) and 3 billion yuan for a division that provides software support and services to carriers around the world, another person said.
Alibaba, which grew to become one of China's two biggest corporations alongside a boom in online shopping, is investing billions in expanding a cloud computing business that competes with Amazon.com Inc and Microsoft Corp. That effort would benefit from ZTEsoft's global client portfolio and relationships with wireless carriers from Europe and Africa.
A sale will also help replenish ZTE's coffers, depleted by a record US$1.2 billion (S$1.39 billion) fine levied this year by the United States government for violating sanctions on technology exports. The company is vying with larger rival Huawei Technologies for contracts to build fifth-generation networks in China and around the world, an effort that will soak up billions for research and development alone.
Get The Straits Times
newsletters in your inbox
Alibaba and ZTE declined to comment. ZTE's Nanjing-based subsidiary, which provides business and operations support to clients such as Orange and KPN, has said its software has been deployed in more than 70 countries.