Alibaba Corporation bought China's largest video portal for $ 3.7 billion

Alibaba Group Holding Ltd, the largest media corporation in China, announced on the eve of the purchase of China's largest video portal, Youku Tudou . The approximate cost of the transaction is estimated at $ 3.7 billion - a little more than the company offered for “Chinese YouTube” last month.

According to the information from the company's official release, Alibaba will pay $ 27.6 for each share of the Youku video portal. Recall that the corporation already owned 18.3% of the shares of the largest national video hosting and offered to buy out the remaining share at a price of $ 26.6.

According to Reuters, one of the largest transactions in the history of the Chinese Internet industry will open access for the national giant to an extensive user base, which currently stands at more than 500 million users. According to Bloomberg, this agreement will allow the Alibaba group of companies to strengthen the group’s position in a bitter battle with its competitors, Baidu and Tencent Holdings.
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The transaction is expected to close in the first quarter of 2016 according to standard procedures for such transactions. The current executive director of Youku Tudou, Victor Koo (Victor Koo) will remain at the helm of the video portal. “Alibaba’s support will provide a bright future for our entertainment platform,” said Mr. Koo in his official statement.

Recall that Youku Tudou at one time was also formed as a result of the merger of two Youku and Tudou companies (“potatoes” in Chinese), and the amount of the transaction then amounted to more than 1 billion dollars.

It is also worth noting that in recent years, AliBaba has invested heavily in the digital media industry in China. Thus, in March 2014, the corporation bought out a controlling stake in ChinaVision Media Group for $ 804 million, thereby ensuring access to TV and video content of a new partner. Currently, the new company is called Alibaba Pictures.

A little later, Alibaba announced its intention to pay about $ 1 billion for a 20% stake in Wasu Media Holding Co Ltd, and in the spring of this year, the corporation invested $ 383 million in Beijing Enlight Media Co.

It can be assumed that activating the company on the national market will allow the corporation to also increase its influence in the international arena and, probably, to impose a struggle (at least in certain regions) on such large players as Amazon and Google.