Billionaire Jack Ma’s Chinese e-commerce giant Alibaba on Friday announced a multi-billion- dollar deal to take over video streaming service Youku Tudou as it seeks to spread its online empire. Alibaba is snapping up Youku Tudou, China’s equivalent to YouTube, in the latest of a string of acquisitions as it sets its sights far beyond its core eBay-style transactions business.
In a “definitive merger agreement”, Alibaba will pay $27.60 in cash per US-traded American depositary share in Youku Tudou, the companies said in a statement, without giving the overall value. The price is 35 per cent higher than the share price on October 15 just before the takeover bid was first announced. The agreed price is slightly up from the first bid of $26.60, an offer that had a total deal value of about 4.6 billion (4.2 billion euros) according to Bloomberg News.
Alibaba already owns more than 18 per cent of Youku Tudou, which offers mostly professionally produced video content licensed from copyright holders. Launching the takeover bid last month, Alibaba’s Ma said he aimed to develop the hugely popular Youku Tudou as China’s leading digital entertainment platform.
“We are confident that we will strengthen our market position and further accelerate our growth through the integration of our advertising and consumer businesses with Alibaba’s platform and Alipay services,” said Youku Tudou chief executive Victor Koo in a joint statement with Alibaba.
The deal, unanmously approved by Youku Tudou’s board, is expected to close in the first quarter of 2016 subject to approval by shareholders, the two firms said. Meanwhile, Chinese e-retailer firm has filed a lawsuit against e-commerce giant Alibaba, accusing it of using "deceptive" advertisements, setting off a major legal battle between them ahead of the Singles' Day sale, the biggest in the year.
According to Haidian District people's court, JD.com accused Tmall.com, which is under Alibaba of exaggeration on some outdoor and newspaper advertisements in September that promised same-day delivery in Beijing.
Actually, only residents in certain parts of the city are able to enjoy the service, and only on items ordered before a certain time of the day.
Many people still have to wait until the next day to get their packages, said JD.com, state-run Xinhua news agency reported. JD.com, which is well known for its swift delivery, said the deceptive ads were unfair, and could harm both the credibility and economic interests of JD.com.
JD.com asked the defendant to stop posting the ads and release a statement admitting they had been deceptive. Alibaba has not made any comment on the issue so far.