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Friday, October 16, 2015, 17:25

Alibaba bids to buy online video firm Youku Tudou

By Xinhua

HANGZHOU - China's Internet conglomerate Alibaba announced Friday that it has made a non-binding all-cash offer to acquire the rest of the country's most popular online video streaming website Youku Tudou Inc.

Alibaba currently owns 18.3 percent of the outstanding shares of Youku after a strategic investment in April 2014. It said in a press release that it proposed to buy the rest for US$26.6 per American depositary share in a US$4.2-billion deal.

The offer represents a 30 percent premium to Youku's closing price on Thursday when Youku's shares rose 4.88 percent to close at US$20.43 in New York.

Alibaba said it is making the proposal with the support of the founding shareholders of Youku, including Victor Koo, Chengwei Capital and their affiliates.

Under the proposal, Youku's founder, Victor Koo, would continue to lead the business as chairman and chief executive officer.

Digital entertainment is core to Alibaba's strategy of promoting consumption of virtual goods and services.

"Digital products, especially video, are just as important as physical goods in e-commerce, and Youku's high-quality video content will be a core component of Alibaba's digital product offering in the future," said Daniel Zhang, chief executive officer of Alibaba Group.

"A closer partnership with Youku will give us the opportunity to support Victor and his leadership team to fulfill the dream of building the leading digital entertainment platform in China," said Alibaba Group executive chairman Jack Ma.

Youku currently has more than 500 million active users.

After ambitious investments and acquisitions over the past few years, Alibaba, which once mainly focused on e-commerce and digital payment, has entered an array of new businesses, like digital mapping, music, taxi hailing, group buying, instant messaging and online tourism and learning.

Alibaba's shares rose 4.73 percent to close at US$71.78 in New York on Thursday. Despite the rally, its shares have fallen 40 percent from its all-time-high of US$120 in early November last year amid growth concerns.

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