Alibaba to buy out UCWeb in China’s ‘biggest’ internet merger

Alibaba to buy out UCWeb in China’s ‘biggest’ internet merger

2:21am EDT

By Paul Carsten

BEIJING (Reuters) – Alibaba Group Holding Ltd said on Wednesday it will buy all the remaining shares of mobile browser firm UCWeb in the biggest merger in Chinese internet history, as the e-commerce giant steps up its spending spree ahead of its U.S. listing.

Alibaba’s latest deal, hot on the heels of a string of investments which already total $4.8 billion in the past six months, will be larger even than Baidu’s $1.9 billion acquisition of 91 Wireless last year, Alibaba said.

Alibaba’s investment in UCWeb emphasises the company’s push to do more business on mobile in the world’s biggest smartphone market. But rival Tencent Holdings Ltd, China’s biggest listed Internet firm, dominates smartphone screens with its near-ubiquitous mobile messaging app WeChat, a situation which Alibaba executives have publicly railed against.

“This integration will create the biggest merger in the history of China’s Internet,” Alibaba said on its microblog.

Alibaba already held about a 66 percent stake in UCWeb, according to its May IPO filing. The e-commerce giant and UCWeb will form the UCWeb Mobile Business Group responsible for internet browsers, search services, location-based services, the mobile gaming platform, mobile application distribution and mobile literature services, UCWeb said in a statement.

UCWeb Chief Executive Yu Yongfu will act as chairman of the business group and become part of Alibaba’s “strategic decision-making committee”, Alibaba said.

Alibaba is preparing for a U.S. initial public offering that could value the firm as high as $150 billion, according to analyst estimates. Even so, the firm and its affiliates have splurged on investments totalling more than $6.7 billion in the past six months alone.

The deal will mainly be done using Alibaba’s stock with a smaller part as cash, Alibaba said.

UCWeb said the mobile search service had a market share of more than 20 percent.

(Reporting by Paul Carsten; Editing by Stephen Coates)

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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