Alibaba to pay about $3.7 billion for 'China's YouTube'
By Anya George Tharakan and Devika Krishna Kumar
(Reuters) - Alibaba Group Holding Ltd (BABA.N: Quote) agreed to buy Youku Tudou Inc YOKU.N - popularly known as "China's YouTube" - for about $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 percent to $26.80 in premarket trading on Friday, below Alibaba's offer of $27.60 per ADS.
Alibaba held 18.3 percent of Youku Tudou as of Oct. 16, when it made its initial offer of $26.60 per ADS. The new offer values the rest of Youku Tudou at about $4.8 billion.
The new offer represents a premium of 35.1 percent over Youku Tudou's closing price on Oct. 15.
Any deal would include the $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 $3.7 billion under its revised offer. Continued...