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Your current location:Home >> Industry News >> ZTE softcreate sells itself to Alibaba, employees:
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According to Bloomberg, people familiar with the matter said Alibaba group is close to reaching an agreement with ZTE to acquire ZTE SoftMaker, a software subsidiary of ZTE. The deal could help Alibaba strengthen its global Internet computing business to compete with Amazon and Microsoft.
According to ZTE’s official website, the company was founded in 2003, with its headquarters in Nanjing. It has R & D centers in Guangzhou, Changsha and Xiamen. It is a subsidiary of ZTE. At present, it has been listed on the new third board, and has sales offices in many countries and regions. Its products have large-scale commercial applications in more than 80 countries and regions, involving 145 operators and end users More than 700 million.
ZTE softcreate has been providing business and technical support to global operators, including well-known communication companies such as orange (French telecom operator) and KPN (Royal Dutch Telecom Group).
At present, ZTE’s products have successfully served China Telecom, China Mobile and China Unicom in China, and have expanded into multinational operators such as France Telecom, Telenor, Emirates Telecom and Virgin Mobile in the world, among which the international sales revenue accounts for more than 60% of the company’s revenue. According to the 2008 Industry Report of Gartner, an international authoritative market research institution, ZTE Software Co., Ltd. ranked among the top 15 in the field of telecom software services in the world, and successively acquired the core assets of Guangzhou southern Telecom System Software Co., Ltd. and Chuangzhi Software Park telecom business boss.
ZTE software has 3000 software R & D related personnel, of which 97.8% have bachelor’s degree or above. ZTE software is a national key layout software enterprise, with a number of qualifications, passed the international software development ability level certification, and the company’s management structure and process have the enterprise level of international software suppliers. By building a business model of "product software + software service", ZTE soft innovation is establishing its leading position in the field of communication software and services. With its outstanding performance in the field of telecommunication software, ZTE soft innovation has won many industry awards at home and abroad.
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The purchase price paid by Alibaba is between 2 billion yuan and 3 billion yuan due to ZTE’s numerous overseas projects, the source said. According to the annual report data of ZTE soft innovation, in 2016, the company achieved an operating revenue of 1.93 billion yuan, up 10.90% year-on-year, and a net profit of 127 million yuan, down 17.88% year-on-year.
Ali and ZTE have been negotiating for several months on the acquisition of ZTE softstart, and are close to reaching an agreement. ZTE, the controlling shareholder of ZTE soft, holds 89%, and Jiaxing Euler investment partnership, another shareholder, holds 11%. According to the latest negotiations, Alibaba holds 51% of the shares and Softbank 10%.
According to anonymous users, the transaction has been basically settled at the beginning of this month. ZTE’s offer is 3 billion yuan, while Ali’s offer is 2.6 billion yuan, and both sides are still in the price negotiation stage. ZTE’s employees said that their colleagues are spreading the story. After ZTE’s acquisition by Ali, the company’s employees will directly become Ali’s employees, and the shares held by employees will be charged by ZTE’s three times the price Purchase.
The deal also helped ZTE replenish its cash reserves after it was fined $1.2 billion by the U.S. government for violating technology export controls. ZTE and Huawei are competing for the fifth generation mobile network construction contract at home and abroad. The R & D investment alone will reach billions.
According to the analysis of relevant market participants, the main reason why Alibaba is interested in ZTE soft innovation is that it hopes to expand Alibaba’s cloud computing business and strengthen its overseas business level through ZTE soft innovation technology, so as to compete with Amazon, Microsoft and other two cloud technology giants.
Ali and ZTE had no comment as of the release.