Alibaba, Youku Tudou make merger final

In a deal worth about US$3.5 billion, the Chinese e-commerce and ad-tech giant assumes 60.6% total voting power of the YouTube-like brand. (Pictured: Youku Tudou CEO Victor Koo)
November 6, 2015

Jack Ma’s dream of building a leading digital entertainment platform in China has moved one big step closer to reality following the merger of Youku Tudou into Ma’s rapidly expanding Alibaba empire.

Alibaba confirmed the  acquisition of Youku, which is China’s YouTube-like streaming service, on Nov. 6 in a deal reportedly worth about US$3.5 billion. The all-cash transaction gives Alibaba approximately 60.6% of the total voting power of Youku shares, of which the final price represents a premium of 35.1% over the closing price of Youku Tudou’s corporate share price, as of Oct. 15, 2015.

Youku’s board of directors, led by Victor Koo (pictured), unanimously approved the merger after seeking recommendations from an independent special committee.

Koo, who will remain on board as Youku Tudou CEO, said in a statement that the deal maximizes value for the company’s shareholders, and also benefits customers by allowing it to grow its content and multi-screen offerings.

“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,” he said.

The transaction is expected to close in Q1 2016 and is subject to customary closing conditions, including the majority agreement of shares present.

Alibaba, which has built a multi-billion-dollar empire on e-commerce and advertising, already owned an 18.3 % stake in Youku, an investment for which it paid about $1.2 billion in 2014.

The move comes as the company, headed by Ma, has been making aggressive forays into the streaming world. In September, it launched its SVOD service, Tmall Box Office (TBO) on some box tops into the Chinese market, OTT devices and various smart TVs. The arrival of the service was announced in June, just weeks after Netflix was widely rumored to be exploring its options in China, the world’s second-largest economy.

(From Stream Daily)

About The Author
Managing editor with realscreen publication, an international print and online magazine that covers the non-fiction film and television industries. Darah is an award-winning journalist who has spent over two decades covering a wide range of issues from real estate and urban development to immigration, politics and human rights, primarily with The Vancouver Sun. Prior to joining realscreen, she was editor of Stream Daily, realscreen's sister publication covering the dynamic global digital video industry. She also served a stint as a war reporter in Afghanistan for television and print, and was a national business blogger with Yahoo Canada.