Alibaba, Yunfeng Takes 18.5% Of Youku Tudou For $1.22B

Beijing-based video sharing platform Youku Tudou Inc. says that it has agreed to have Alibaba Group and Yunfeng Capital invest a total of US$1.22 billion in exchange for a 18.5% stake of the company, according to a company announcement.

The Chinese e-commerce giant Alibaba Group and Yunfeng Capital, a Shanghai-based private equity firm co-founded by Alibaba founder Jack Ma, will purchase 707 million newly issued shares and 13 million existing class A ordinary shares of the New York Stock Exchange-listed Youku Tudou at US$1.6944 per share.

The purchasing price equals to US$30.50 per American Depositary Share. Alibaba and Yunfeng Capital will indirectly hold approximately 16.5% and 2.0% of Youku Tudou respectively on a fully-diluted basis.

The deal is expected to close in the near future, says the announcement, without specifying a timeline.

Jonathan Lu, CEO of Alibaba, will join Youku Tudou’s board of directors when the deal closes.

"We are excited to cooperate and work closely with (the Youku Tudou) team to support their innovation in this key emerging space as well as accelerate our digital entertainment and video content strategy," says Jack Ma, executive chairman of Alibaba.

"This is an important strategic initiative that will further extend the Alibaba ecosystem and bring new products and services to Alibaba’s customers," adds Ma.

Last month, Chinese media reported that Shenzhen-based Chinese Internet services giant Tencent Holdings Ltd. has agreed to acquire around 20% of Youku Tudou for at least US$300 million.

That deal appeared to have been outbid by the current Alibaba transaction.

China Money Network Subscription
Caishen.Co - Primary Data for China Secondary Investment and Stock Markets