Alibaba forks out $803M for controlling stake in media firm
Alibaba Group is set to fork out HK$6.24 billion (US$803.74 million) for a controlling stake in ChinaVision Media Group, gaining immediate access to a host of content including television dramas, movies, live sports, and games.
This purchase will increase Alibaba's stake from 27 percent to 70.8 percent, with the Chinese e-commerce giant buying over the additional 12.5 billion shares at a 22 percent discount of the previous closing price, reported Bloomberg Wednesday, citing a filing by ChinaVision. The company produces and distributes movies and television dramas.
The deal will give Alibaba access to the media company's content portfolio, including live sporting programs such as the English Premier League, and further boost its gameplay against competitors Tencent and Baidu. According to the report, Tencent has a 8 percent stake in ChinaVision which will drop to some 3.2 percent following the completion of Alibaba's new shares.
"We are pleased to collaborate with the ChinaVision Media Group to explore future business opportunities as part of Alibaba's digital entertainment strategy," the e-commerce operator said in a statement to Bloomberg.
The company last year entered the Internet TV space with the launch of its own smart TV operating system(OS) and set-top box. Alibaba said this was part of its plans to offer a TV-centric ecosystem allowing Chinese consumers to access digital content, share content with mobile phones and other devices, as well as shop and pay bills via their TVs.
In its latest third-quarter earnings, Alibaba clocked a net profit of US$792 millionfueled by higher advertising fees, but its revenue growth slowed to 51 percent. The company's also prepping for its IPO (Initial Public Offering), which analysts estimate could put its value at over US$100 billion.