Alibaba to buy ‘China’s YouTube’ Youku Tudou in a $4.8 billion deal

8 Nov 2015 | Author: | No comments yet »

Alibaba buys China’s version of YouTube for $3.7 billion.

Shares in online video platform Youku Tudou were up 8.12 per cent to US$26.35 in mid-afternoon trading in New York on Friday after the company arrived at a takeover deal with e-commerce giant Alibaba Group Holding.The Alibaba Group, the Chinese e-commerce giant, announced Friday that it has reached a deal to buy Youku Tudou, one of China’s leading online video sites, which is said to reach more than half a billion users. It is also a vote of confidence in China’s economy by Alibaba chairman Jack Ma, who has said investors should not overreact to his country’s slowing growth.

Shares in Alibaba, which already held a one-fifth stake in the company, initially gained on the news but was down 3.69 per cent at US$82.23 at 1.30pm. Since then, the company has used that war chest to spread its footing through acquisitions and investments in businesses like Jet (for e-commerce in the U.S.), Lyft and Didi Kuaidi (for ride-hailing around the world) and Peel (for the connected home). Youku Tudou chief executive Victor Koo, a Bain & Co. alumnus who owns about 18% of Youku Tudou, will remain CEO of Youku Tudou after the deal closes in the first quarter of 2016. “With Alibaba’s support, Youku Tudou’s future as the leading multi-screen entertainment and media platform in China has been firmly secured,” Koo said in a statement. Formerly bitter rivals, Youku— which means “what’s best and what’s cool” in Chinese— merged with Tudou (“potato”) in a deal worth over $1 billion in 2012.

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