Alibaba buys rest of UCWeb to boost mobile apps
Alibaba Group, China's largest e-commerce operator, has agreed to acquire the rest of UCWeb to add internet browsers and an application store to its mobile service.
The cash-and-stock deal will see 3,000 workers join Alibaba as the business is fully integrated, the companies said in a joint statement yesterday.
Alibaba, which already had a 66 per cent economic stake in UCWeb, said the valuation for UCWeb surpasses the US$1.9 billion paid by Baidu for 91 Wireless last year as China's biggest internet deal.
Billionaire Jack Ma Yun's Alibaba and UCWeb are collaborating in areas such as payment, search and gaming services as competition intensifies in China, the biggest market for smartphones. UCWeb is boosting spending to challenge Tencent Holdings and Baidu as a surge in mobile use drives demand for games, apps and the platforms to deliver them.
"UC is an important factor in China's industry today," Ma said in a letter to Alibaba employees.
"It has shown strength in international development and we believe the integration of UC and Alibaba will bring more change and imagination to the industry."
Ma, executive chairman of Hangzhou-based Alibaba, joined UCWeb's board in August. The 66 per cent stake was held through convertible preferred shares, according to a filing in May.
Florence Shih, a spokeswoman for Alibaba, confirmed Alibaba is buying the rest of UCWeb.
UCWeb intends to boost spending by 67 per cent to five billion yuan (HK$6.3 billion) in the three years to 2015 to build products and expand overseas, Chief executive Yu Yongfu said last month.
The Beijing-based company wants to reach one billion users in three years, with about half of them outside China, mostly by relying on its browser and search offerings, Yu said.
UCWeb had more than 500 million mobile-browser users and about 50 million customers at its app store in May.
UCWeb has been profitable since 2009, and revenue has doubled in each of the past three years, Yu said.
Revenue also is expected to double this year, Yu said without elaborating.
Alibaba is preparing for an initial public offering in New York that could value it at more than US$150 billion, the biggest listing by a technology company.