Alibaba is frontrunner to buy Unigroup - report

Beijing is attracted by the Alibaba-led offer because of its financial strength and potential synergies between Unigroup and its own cloud and chip business, Bloomberg reported. A takeover could value Unigroup at more than 50bn yuan (£5.8bn), Bloomberg said.

The consortium, which includes funds backed by the Zhejiang government, is ahead of several competitors for Beijing-based Unigroup, people familiar with the matter told Bloomberg. Unigroup is China's national chip champion and is backed by the country's top engineering school but its future has been thrown into doubt by a series of bond defaults.

In June 2020 the company had $31bn of debt after making a string of acquisitions, most of which were unsuccessful. Unigroup's fate is politically sensitive because it was meant to lead China's efforts to produce its own computer chips after the US imposed restrictions on sales of foreign-made chips to Chinese companies.