Chinese e-commerce giant Alibaba Group has unveiled a US$1.22 billion acquisition plan to buy 721 million Class-A shares of online video firm Youku Tudou Inc. via a joint venture with Yunfeng Capital.
Under the purchase agreement, Alibaba and Yunfeng will hold 16.5 and 2 percent stakes respectively in the Chinese internet television company, according to an emailed press release Monday. Jonathan Lu, chief executive of Alibaba, will join Youku Tudou’s board as a director upon completion of the transaction.
Yunfeng Capital is private-equity firm co-founded by Alibaba’s chairman Jack Ma.
Youku Tudou said it will forge a strategic relationship with Alibaba on both capital investment and business cooperation fronts, with a view to building an immersive cultural entertainment platform that integrates online and offline entertainment.
Market observers have been concerned that Youku and other internet video companies will be hit by tighter rules on the content of online programs. The State Administration of Press, Publication, Radio, Film and Television has banned some drama series produced in the United States from being aired in China.
Alibaba’s latest deal marks the third such transaction backed by Jack Ma so far this year, following a 6.24 billion yuan (US$997.9 million) investment in ChinaVision Media Group (01060.HK) in March and a 6.54 billion yuan deal in Wasu Media Holdings (000156.CN) earlier this month.
Meanwhile, the group — which is gearing up for an initial public offering in the US, is launching a new mobile search engine ‘sm.cn’ with UCWeb Inc., focusing on the search of applications, shops and novels on mobile platform, Sinatech.net reported.
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