Alibaba, long associated with e-commerce, is making a big entertainment investment by acquiring Chinese online video giant Youku Tudou for about US$3.7 billion.
Alibab held 18.3% percent of Youku Tudou, but last Friday offered to buy out the remaining 81.7% of Youku Tudou for US$26.60 a share.
Youku Tudou, popularly known as China’s YouTube, will give Alibaba access to more than half a billion online video users, accelerating its push into the Chinese digital media market.
“We are eager to work with Alibaba to grow our multi-screen entertainment and media ecosystem. 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," said Victor Koo, chairman and CEO of Youku Tudou.
"With Alibaba’s support, Youku Tudou’s future as the leading multi-screen entertainment and media platform in China has been firmly secured.” he added.
Koo will remain chairman and CEO positions at Youku Tudou. If the transaction is completed, the company’s ADSs will no longer be listed on the New York Stock Exchange.
It’s not the first media company Alibaba has taken interest in. Last year it bought a controlling stake in ChinaVision Media Group Ltd for US$804 million, rebranding it shortly after as Alibaba Pictures.