China Life in $12bn Chinese telco privatisation

The insurer is keen to explore other opportunities brought by Beijing’s ‘mixed-ownership reform’ scheme, following its $3.26bn investment in China Unicom.

China Life Insurance Company, the country’s largest life insurer, is acquiring 10.5 percent of China Unicom, making it the biggest strategic investor in the $11.7 billion privatisation of the country’s second-largest telecom carrier.  

Unicom is among six state-owned enterprises chosen by Beijing to carry out the pilot phase of its ‘mixed-ownership reform’ scheme, which aims to introduce private capital into SOEs. The private placement of 35.2 percent of Unicom’s A-shares has attracted nine strategic investors, including China Life, Tencent, Alibaba, Baidu and, following approvals by Chinese regulators. 

China Unicom has 270.7 million mobile subscribers and 736,000 4G base stations in operation – 539,000 of which are in 139 key cities.

Yang Mingsheng, chairman of China Life, said during a press conference in Hong Kong that following the “successful” pilot investment in the mixed-ownership reform asset, the company is keen to explore opportunities in other SOEs under the scheme. 

The $389 billion firm is also seeing more private equity investment opportunities in health and pensions, supply-side reform and infrastructure. It announced yesterday that it would team up with Chinese search-engine provider Baidu to create a 7 billion yuan ($1 billion; €890,000) private equity fund targeting Chinese companies in internet-related sectors. 

The Chinese insurer has invested about $11.6 billion, equivalent to 2.9 percent, in overseas markets across all asset classes, according to Zhao Liyun, chief financial officer of China Life. He added that the company would like to accelerate its overseas investments, despite impacts from Beijing’s currency control policy. 

Last December, China Life and a Chinese partner bought a 50 percent interest in a 2,229km gas distribution network owned by Sinopec, in a $3.3 billion deal.