MARK Zuckerberg and Xiaomi Inc chief executive Lei Jun discussed a potential investment by Facebook in China’s top smartphone maker ahead of its $1.1-billion (R12.67-billion) fundraising last month, but a deal never materialised.
The discussions, at a private dinner when Zuckerberg visited Beijing in October, were never formalised, people with knowledge of the matter said.
The two chief executives weighed the political and commercial implications of Facebook – which has been banned in China since 2009 – buying into the Chinese tech star now valued at $45-billion (R518-billion).
One person with direct knowledge of Xiaomi’s fundraising said the mooted Facebook investment was not huge, but the talks underscored how ties between US and Chinese companies have deepened as China’s tech industry matures.
A Facebook investment in Xiaomi would have raised the international profile of the popular handset maker dubbed “China’s Apple” by its fans and linked it to a US social networking phenomenon with more than 1.3 billion users.
Facebook, for its part, has long harboured ambitions to expand into the world’s most populous country, potentially with partners. Facebook and Xiaomi began discussing a possible investment in the middle of last year.
Xiaomi’s Lei was partly put off by the potential for political fallout at home of selling a stake to Facebook while the US social network is still banned in China, two of the people said.
Xiaomi also feared a tie-up with Facebook could threaten its relationship with Google Inc, a crucial business partner. Xiaomi’s phones are built on Google’s Android operating system.
Xiaomi ultimately announced last month it raised $1.1-billion from investors including Hong Kong-based tech fund All Stars Investment and DST Global, a private equity firm that has invested in Facebook and Alibaba Group.