Alibaba ‘in talks’ to buy ZTESoft Cloud unit
Alibaba is talking to ZTE about buying its software and cloud unit ZTESoft, says report
Chinese company Alibaba is talking to ZTE about acquiring its software subsidiary ZTESoft, according to an unconfirmed report. Negotiations have been going for several months, with rumours that an agreement is near completion, says Bloomberg.
A deal would be in the region of 2 billion yuan ($294 million), says the report. The acquisition of the software support and global carrier services division will help strengthen the Alibaba’s global internet computing business.
The move is in line with Alibaba’s global strategy to expand a cloud computing business to rival that of Amazon and Microsoft, a plan that will greatly benefit from ZTESoft’s client portfolio and relationships with wireless carriers in Europe and Africa.
The rumoured sale is also set to benefit ZTE as it replenishes funds lost after its record fine of $1.2 billion fine levied by the US government earlier this year. The company was fined for violating sanctions on technology exports, after admitting to smuggling hardware and software into Iran. Also as competition with Huawei over contracts to build 5G networks in China and all over the world, the sale of ZTESoft ensures continued investment.
Both Alibaba and ZTE have yet to comment on the discussions, but ZTE’s Nanjing-based subsidiary has said its software has been deployed in more than 70 countries, according to the Bloomberg report.