Alibaba agrees $4.3bn merger with Youku Tudou
Alibaba has bought Chinese online entertainment company Youku Tudou for $4.3bn (£2.8bn) in a bid to increase its presence in China's booming online video sector.
The price represents a premium of 35.1 per cent over the closing price of Youku Tudou shares the day before Alibaba signalled its takeover intentions.
Alibaba upped its original offer from $26.6 per American Depository Share to $27.6 to secure total control of the group.
The deal, which sees China's biggest e-commerce firm merging with one of its leading online video platforms, signals Alibaba's growing activity in entertainment.
Alibaba had already purchased 18 per cent of the company for $1.2bn in May 2014 and holds stakes in Chinese film distributors and production houses.
Earlier in the year it launched its own Netflix-style streaming service, Tmall Box Office, which could now be combined with Youku Tudou.
Last month Alibaba founder Jack Ma said: "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."
Victor Koo, chairman and chief executive officer of Youku Tudou said the deal maximised value for the company's shareholders.
He commented:
We are eager to work with Alibaba to grow our multi-screen entertainment and media ecosystem. 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.
Youku Tudou's share price, which was sent soaring by 23 per cent when Alibaba announced its takeover offer on October 16, rose over eight per cent on pre-market trading on the New York Stock Exchange.