China’s leading ecommerce giant Alibaba has bought China’s equivalent of YouTube, online video site Youku Tudou, in a cash deal estimated to be worth $3.7 billion.
Founded in 2012 via a merger of rival sites Youku and Tudou and listed on the New York Stock Exchange, Youku Tudou allows users to search, view and share high-quality video content across multiple devices.
Alibaba previously held 18.3 per cent share in the online video company. With the merger, the former would gain access to more than 580 million online video users a month, further bolstering its play in the Chinese digital media market.
In the joint statement, Youku Tudou said its board of directors unanimously approved the merger and “recommends that shareholders” also would vote to authorise and approve the buyout.
Youku Tudou Chairman and CEO said, “We are eager to work with Alibaba to grow our multi-screen entertainment and media ecosystem. We are confident that we will strengthen our market position and further accelerate our growth through the integration of our advertising and consumer businesses with Alibaba’s platform and Alipay services.”
The deal is expected to be finalised in the first quarter of 2016. Upon its completion, Koo would remain as chairman and CEO of Youku Tudou, which shares then would be taken off the New York Stock Exchange.