Unity Software Weighs China Unit Spin Off Amid Challenging Sino - US Relations - Unity Software (NYSE:U)

Unity Software Inc U sought strategic investors to join it in a business valued at over $1 billion as it looks to spin off its China unit, Reuters reports.
The talks coincided with strained Sino-U.S. relations, and aggravated sensitivities over technology transfer and data handling across borders, prompting tech firms to reappraise their operations in China.
Recently, China emphasized the risks to national security inherent in transferring user data overseas, sending shockwaves to companies like Alibaba Group Holding Limited BABA.
The U.S. Congress had also pushed a ruling proposing screening investments in rival countries like China to protect U.S. technologies and rebuild critical supply chains.
At the same time, there is growing interest in expanding game-making software to new technologies like the so-called metaverse.
With China tightening data handling regulations, Unity believes a spin-off would give the unit more local ownership and autonomy.
CEO Zhang Junbo has been working on the plan for at least a year.
However, Unity's share price sank 80% since its November 2021 high amid weakness in U.S. tech stocks and a product missing performance expectations slowed down Junbo's aspirations.
He had previously shared Unity's plans to hire over a thousand engineers while expanding offices in Beijing and Guangzhou and its main office in Shanghai.
Price Action: U shares traded higher by 1.22% at $41.46 in the premarket on the last check Wednesday.