(Nov 6): Alibaba Group Holding Ltd agreed to buy Youku Tudou Inc — popularly known as "China's YouTube" — for about US$3.7 billion, slightly more than it had offered in October.

The deal announced on Friday will give the e-commerce giant access to more than half a billion online video users, accelerating its push into the Chinese digital media market.

It is also a vote of confidence in China's economy by Alibaba Chairman Jack Ma, who has said investors should not overreact to his country's slowing growth. Youku Tudou's American Depositary Shares rose 10% to US$26.80 in premarket trading on Friday, below Alibaba's offer of US$27.60 per ADS. Alibaba held 18.3% of Youku Tudou as of Oct 16, when it made its initial offer of US$26.60 per ADS. The new offer values the rest of Youku Tudou at about US$4.8 billion. The new offer represents a premium of 35.1% over Youku Tudou's closing price on Oct 15.

Any deal would include the US$1.1 billion of cash held by Youku Tudou, Alibaba's chief financial officer, Maggie Wu, said in October. Based on this, Alibaba will end up paying about US$3.7 billion under its revised offer.

Unprofitable Youku Todou needed the partnership with Alibaba, Summit Research analyst Henry Guo said. Youku Tudou Chief Executive Victor Koo, a Bain & Co alumnus who owns about 18% of Youku Tudou, will remain CEO of Youku Tudou after the deal closes in the first quarter of 2016.
"With Alibaba's support, Youku Tudou's future as the leading multi-screen entertainment and media platform in China has been firmly secured," Koo said in a statement. Formerly bitter rivals, Youku — which means "what's best and what's cool" in Chinese — merged with Tudou ("potato") in a deal worth over US$1 billion in 2012. Alibaba has made a number of sizeable investments in digital media in China in the past couple of years.

In March 2014, it agreed to buy a controlling stake in ChinaVision Media Group Ltd for US$804 million to get access to TV and movie content. The company is now known as Alibaba Pictures.
A month later, Alibaba said it would pay about US$1 billion for a 20% stake in Wasu Media Holding Co Ltd.

In March 2015, TV program producer Beijing Enlight Media Co Ltd said Alibaba had invested US$383 million.

Morgan Stanley Asia Ltd advised Alibaba, while J.P. Morgan Securities (Asia Pacific) Ltd advised Youku Tudou's special committee.

-Reuters November 6, 2015

Shares Could Begin Trading as Soon as Sept. 18 or 19

What will likely be the world's largest initial public offering in years appears to be just over a week away.

Chinese e-commerce giant Alibaba Group Holding Ltd. plans to launch its U.S. IPO early in the week of Sept. 8, as the company aims to complete its monthslong dialogue with U.S. regulators, a person familiar with the deal said.

A launch that week, kicking off a deal that could raise more than $20 billion and be the world's largest in years, would mean Alibaba shares could begin trading as soon as Sept. 18 or 19 in New York, the person said. Alibaba's leadership initially sought to launch the deal by the end of August but moved the target to September, people familiar with the deal have said, because of investor summer vacations and the need to secure regulatory approval for the deal.

Alibaba Profit More Than Amazon and EBay Ahead of U.S. IPO

Alibaba Group Holding Ltd. has been described as a mixture of Amazon.com Inc. and EBay Inc. during the preparation for its U.S. initial public offering.

In the last quarter, Alibaba earned more than those companies combined. Operating income at China’s biggest e-commerce operator rose to $1.1 billion in the three months ended June, or 42 percent more than the combined profit of Amazon and EBay for the period.

After including one-time gains, Alibaba’s net income was more than double those of its competitors. Alibaba’s results, probably the last before the IPO, underscore how its Taobao and Tmall platforms are connecting consumers to businesses in the most populous nation and how the company is transitioning to mobile services.