SHANGHAI - China's Alibaba said on Wednesday it will absorb mobile browser developer UCWeb, calling it the "biggest" merger in the country's Internet industry, as the e-commerce giant continues a deal binge before listing.
Alibaba has stepped up acquisitions to expand beyond its traditional online shopping business ahead of a planned US listing that could raise around $15 billion, putting it on par with Facebook's $16 billion IPO in 2012. This marks the third deal by Alibaba in a week. On Tuesday, the company unveiled an agreement with state-backed Shanghai Media Group to develop an entertainment platform, and last Thursday it said that it will pay $192 million for a 50 percent stake in China's top football club Evergrande.
"UC will be fully integrated into Alibaba Group. This integration will be the biggest merger in the history of China's Internet industry," Alibaba said, but gave no value for the deal. Alibaba will take the one-third stake in UCWeb that it does not already own, it said. UCWeb chief executive Yu Yongfu said taht the deal would value his company at more than $1.9 billion, according to what is apparently a company memo that was circulating on social media.
In the memo, he compared the transaction to a move last year in which China's most popular search engine Baidu fully acquired smartphone app company 91 Wireless Websoft for that amount. Alibaba said it would settle the deal through a combined cash and stock swap transaction. Founded in 2004, UCWeb is a mobile Internet software and services provider based in the southern city of Guangzhou, which claims 500 million quarterly active users worldwide.
Yu will be head of the UC mobile business unit after the merger and become a member of Alibaba's strategic decision-making committee, the companies said. Alibaba operates China's most popular online shopping platform, Taobao, which is estimated to hold more than 90 percent of the online market for consumer-to-consumer transactions. Previous acquisitions have allowed the e-commerce firm to expand into entertainment and logistics.