Facebook CEO Mark Zuckerberg was in discussions with Xiaomi CEO Lei Jun last month about investing $1.1 billion in China's top smartphone maker, but the deal died on the vine, reports Reuters.

"Facebook wants to get into China, and Xiaomi is keen to expand outside, so they both recognize the importance of working together," a source told Reuters.

Like Us on Facebook

Zuckerberg and Lei discussed the possible investment at a private dinner when the Facebook founder visited Beijing in October. But nothing was ever formalized, sources told Reuters as the two CEOs contemplated the political and commercial implications of the social media site, which has been banned in China since 2009, acquiring a piece of the $45 billion electronics manufacturer.

Considering the size of Xiaomi, the $1.1 billion investment is not quite as large as it sounds.  However, had the deal gone through, it would have certainly boosted Xiaomi's international profile, and  the talks alone demonstrate how relations between U.S. and Chinese companies have deepened as China's tech industry matures, reports Reuters.

Facebook and Zuckerberg have long desired to break into the massive Chinese market, and doing so is always easier with a local partner. A source told Reuters that Facebook and Xiaomi began discussing a possible investment in middle of last year.

According to Reuters, Xiaomi's Lei was dissuaded by the potential for political fallout in China should the compnay sell a stake to Facebook while the U.S. social network is still banned there. Xiaomi also feared a partnership with Facebook could hurt its relationship with business partner Google as. Xiaomi phones run on Google's Android operating system.

Xiaomi  did manage to get a $1.1 billion investment injection, but it came from investors, such as Hong Kong-based tech fund All Stars Investment; private equity firm DST Global, among other sources.

TagsFacebook’s Almost Invested $1.1 Billion in Xiaomi But Deal Fell Through, Facebook Xiaomi discussed possible investment in the Chinese smartphone maker, Mark Zuckerberg, Lei Jun