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Acquisition of UCWeb by Alibaba Group Holding Ltd

Date:11-06-2014

Alibaba Group Holding Ltd which is already an investor in UCWeb said that it will acquire all the remaining shares of the mobile browser firm.

Alibaba’s latest deal comes on the wake of a string of investments by the e-commerce giant which has already reached $4.8 billion in the past six months. Alibaba’s investment in UCWeb emphasizes the company’s desire to do more business on mobile in China.

China's Tencent Holdings Ltd dominates smartphone screens with WeChat, its mobile messaging app.

Alibaba said that this integration will create the largest merger in the history of China’s internet. According to Alibaba May IPO filing, the e-commerce giant already holds approximately 66 percent stake in UCWeb.

UCWeb and Alibaba will jointly form the UCWeb Mobile Business Group for search services, internet browsers, mobile gaming, mobile application distribution, mobile literature services and location-based services.

Alibaba said that Yu Yongfu, UCWeb Chief Executive will become part of Alibaba's "strategic decision-making committee" and will act as chairman of the business group.

According to analyst estimates, Alibaba is preparing for IPO in United States which could value the firm as high as $150 billion. Alibaba and its affiliates have spent more than $ 6.7 billion on investments in the past six months.

This merger is expected to present a challenge to Alibaba’s rival Baidu, since UC Browser of UCWeb is the world's most popular mobile browser which has around 5 million users. UCWeb which was founded in 2004 has more than half of the entire market share.

Alibaba is the world's biggest online and mobile commerce company. Last year, the e-commerce company had a gross merchandise volume of $248 billion on its three major trading platforms. Alibaba is also the world's biggest payment processor with a payment volume of $ 519 billion in 2013 and it also provides cloud computing services.

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