Chinese e-commerce conglom Alibaba Group is to buy out video streaming site Youku Tudou for US$4.6 billion.
Alibaba currently has an 18.3% stake in the business, but is planning on buying the rest for US$26.60 per American depository share in an all-cash deal.
The price set out in a proposal letter to shareholders of the New York-listed Youku Tudou represents a significant premium on the closing share price the day the offer was issued (October 15).
Victor Koo, Youku Tudou’s chairman and CEO, will remain in his post if the deal closes.
Youku Tudou was formed in 2012 upon the merger of Chinese on-demand streaming services Youku and Tudou.
The platform is popular with Chinese net users, and competes with the likes of LiTV and Tencent in the local market. It has recently upsized its investment in original content, which will appeal to the expanding Alibaba, which has created content ventures with the likes of Lionsgate Entertainment and launched its own SVOD platform, Tmall Box Office.
Yesterday, TBI reported Netflix was partnering with Alibaba rival Wanda Group to launch its on-demand service in the territory.