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

LiveMint logoLiveMint 11-06-2014 Paul Carsten

Beijing: Alibaba Group Holding Ltd said on Wednesday it will buy all the remaining shares of mobile browser firm UCWeb Inc. in the biggest merger in Chinese Internet history, as the e-commerce giant steps up its spending spree ahead of its US listing.

Alibaba’s latest deal, hot on the heels of a string of investments which already totalled $4.8 billion in the past six months, will be larger even than Baidu Inc.’s $1.9 billion acquisition of 91 Wireless Websoft Ltd 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% stake in UCWeb, according to its May initial public offering (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 US IPO that could value the firm as high as $150 billion, according to analyst estimates. Even so, the firm and its affiliates will have splurged on investments totalling more than $6.7 billion, including the UCWeb deal, 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%. Reuters

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