ADRs in Focus: Tata Communications shares slide

The company's ADR shed $1.03, or 5.1 percent, to $19.24. ADR stands for American Depositary Receipt, which is a security designed to allow U.S. investors to trade shares of companies based overseas.

"Through the cooperation with Tata Communications, we will focus on the development of the domestic market to provide high quality networking service to multinational enterprises in China as well as China's domestic enterprises," Zhu Jianhua, president and chief executive of China Enterprise, said in a release.

Terms of the deal were not disclosed.

Jianhua said the deal is taking place "under the background of economic globalization, and the fact that China and India are driving the 21st century world economy."

Tata is buying the company through its Tata Communications International Pte Ltd. unit.

"Tata Communications understands and respects the complex, fast-changing and extremely competitive Chinese telecom environment and the needs of customers requiring seamless end-to-end connectivity," Vinod Kumar, president of Tata Communications' data and mobility services.

The Bank of New York Emerging Markets ADR Index--which includes shares of companies based in China, India, Brazil and more--lost 3.19 points to 359.24. The Bank of New York Composite ADR Index shed 1.38 points to 172.89 as the U.S. markets slipped in afternoon trading.