Alibaba Acquires Remaining Stake in UCWeb
36Kr, 6/11/14
Chinese e-commerce conglomerate Alibaba Group and third-party mobile browser developer UCWeb today jointly announced that UCWeb will be completely merged into Alibaba, with Alibaba acquiring all remaining shares in UCWeb not already owned by the company. Alibaba will form an Alibaba-UCWeb Business Group, with UCWeb chairman and CEO Yu Yongfu to join the Group as CEO as well as take a seat on Alibaba Group's strategy committee. In addition to UCWeb's current staff, the new Group will also integrate other related teams at Alibaba and UCWeb, including those involved with UCWeb's "UC Browser" mobile browser, SM.cn mobile search engine, Alibaba's LBS apps, UCWeb's 9game.cn mobile game platform, and its PP Assistant mobile app store.
According to an internal memo from Yu, the merger will be funded primarily with Alibaba stock, with a portion of the acquisition fee to be paid in cash. As per the memo, the transaction places UCWeb's valuation at a "much higher" figure than the USD 1.9 bln that Chinese internet company Baidu (Nasdaq: BIDU) paid for mobile app platform operator 91 Wireless Websoft in 2013.
Alibaba Group made strategic investments of USD 506 mln and USD 180 mln in UCWeb in March and December 2013, respectively, purchasing a combined 66% stake in the company. In May 2014, Alibaba and UCWeb established a joint venture company, Guangzhou-based Shenma Mobile Information Technology, to oversee operation of the companies' SM.cn ("Shen Ma") mobile search engine, with Alibaba holding a 30% stake and UCWeb holding 70%.
Users of UC Browser presently number 500 mln (of which 100 mln are overseas users), and the browser generates more than 6 bln search queries per month.
Editor's Note: For more background on this topic, please see "Alibaba, UCWeb Launch Mobile Search Engine" MD 4/28/14 issue and "Alibaba Files for US IPO" MD 5/06/14 issue.
Keywords: wireless mobile browser UCWeb app store Yu Yongfu Alibaba Group 9game 91 Wireless PP Assistant UC Browser SM.cn M&A
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