Alibaba Agrees to Pay $3.7 Billion for 'China's YouTube'
Chinese online video giant Youku Tudou, known as China's YouTube, said Friday it has agreed to be fully acquired by e-commerce giant Alibaba Group for $27.60 per American depositary share (ADS), slightly more than originally offered.
The definitive deal will give Alibaba full control of the company. It already owns a minority stake in the firm.
In October, Alibaba offered to acquire all remaining outstanding shares of Youku Tudou for $26.60 per ADS in an all-cash transaction. The deal valued the whole company at $4.2 billion.
The revised price tag would see Alibaba end up paying about $3.67 billion, according to Reuters, up from around $3.5 billion.
The final price tag represents a premium of 35.1 percent over the closing price of Youku Tudou's ADSs on the day prior to the news of the initial offer and a premium of 49.9 percent to the volume-weighted average closing price during the three months prior to that date.
Youku Tudou's board, acting on the recommendation of an independent special committee, unanimously approved the deal and recommends that shareholders vote to approve it.
"We believe this combination with Alibaba maximizes value for Youku Tudou shareholders and significantly benefits our customers, users and team," said Victor Koo, chairman and CEO of Youku Tudou. "We are eager to work with Alibaba to grow our multi-screen entertainment and media ecosystem."
He added: "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. With Alibaba's support, Youku Tudou's future as the leading multi-screen entertainment and media platform in China has been firmly secured."
The transaction is expected to close in the first quarter of 2016, subject to customary closing conditions, including the affirmative vote of shares of Youku Tudou representing at least a two-thirds majority of shares voted. The deal would end Youku Tudou's New York Stock Exchange listing.
This article was originally published by The Hollywood Reporter.