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Alibaba to Buy Chinese Digital Video Provider Youku Tudou

by User Not Found | 10月 29, 2015

No one can say Jack Ma, founder and executive chairman of Alibaba Group, thinks small. Continuing a series of investments and acquisitions in the digital media world, on October 16th Alibaba Group submitted a bid to acquire the 81.7% of Youku Tudou, the #1 video service provider in China, that it does not already possess for $3.5 billion (USD) in an all cash deal. This is a 30% premium over Youku Tudou’s stock price the prior day. Clearly, investors like this offer, driving up Youku Tudou’s stock price 23% on news of the deal.

Buoyed by the abundant cash reserves of Alibaba, this acquisition will help Youku Tudou purchase exclusive content in the fight against its rivals. The acquisition of Youku Tudou is a key step in Alibaba’s building an integrated digital media & entertainment company, with a full suite of production, distribution and monetization capabilities. The Youku Tudou deal, when completed, will push China’s video industry into a highly competitive three-way race between heavy weights Baidu, Alibaba, and Tencent.

Our full market analysis of the Youku Tudou deal can be viewed here.

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