Alibaba, the Chinese e-commmerce giant operating online marketplaces, is ready to buy one of China’s top video site, Youku Tudou, in a huge deal that involves cash only.
Alibaba, the New York-listed Chinese e-commerce company, will be paying around $3.6 billion for Youku Tudou‘s take, after it previously invested $1.2 billion. Youku Tudou is a content firm, which has about 580 million users clicking in on the site every month. The deal is great for Youku Tudou because Alibaba intends to pay $26.6 per share which will make Youkou’s value at around $5.2 billion.
According to Tech Crunch, Alibaba, a success on the New York Stock Exchange market, has plans to take Youku Tudou private. Despite the acquisition, Victor Koo, Youku’s chairman and CEO, will not be replace and will remain the company’s head chief. The Chinese video site appeared after rivals Youku and Tudou merged in 2012, dominating the Chinese market on this niche.
As mentioned before, Alibaba already invested $1.2 billion in Youku, meaning that it owns 18,3 percent of the company before the take over, which is scheduled to happen soon.
According to the above mentioned source, Alibaba is best known for its e-commerce services — which include its Taobao marketplace and T-Mall site for brands — but it has also made big plays in content as part of a bid to be more present in Chinese Internet’s users’ daily lives.
Founded in 1999, Alibaba managed to become one of the biggest e-shops in the world and decided to seek glory and profit over seas, opening a data center in U.S., early this year, in March. Satisfied with its entry on U.S. market, Alibaba launched another data center this month, its second, in the land of milk and honey.