FTuan Merges with Gaopeng
Sohu IT, 6/27/12
Chinese group buy site FTuan has announced that plans for a merger between FTuan and Gaopeng, the group buy joint venture of Groupon and Tencent (0700.HK), are now official. Following the merger, FTuan CEO Lin Ning will serve as CEO of the new firm, with most of the management team for the new firm to also come from FTuan. Gao Xia, who had been handling Gaopeng's day-to-day affairs, will become a VP at the new company, responsible for overseeing the independent Gaopeng division. Lin Ning revealed that negotiation of the deal was led not by Tencent, but by FTuan and Groupon's US offices instead, with Tencent acting as a passive investor that is willingly accepting of the merger.
Lin said the that in the new company, the management team will retain control, with Tencent the No. 1 institutional investor, Groupon the No. 2 institutional investor, and now Tencent, Groupon, and investment funds contributing additional funding. Groupon, however, will not actively participate in the new company's operations.
A reliable source within FTuan revealed that Tencent will retain a stake of over 30% in the new company.
In response to questions about whether there would be staff cuts, Lin said the new company currently has about 2,000 staff, and noted that in making future adjustments, harmonizing the different compensation systems of FTuan and Gaopeng would be a challenge.
Lin also divulged that the new company currently has monthly sales of approximately RMB 150-200 mln, and predicted that by the end of the year this figure would increase to RMB 300-400 mln. He added that the new company would not focus on profit, and in the latter half of the year would ramp up marketing activities. The new company will eventually seek an independent IPO.
Lin also said, "The new company will work closely with Tencent's group buy platform, QQ Tuan (tuan.qq.com), which currently sees 60% of its product deals come from us."
Editor's Note: For more information on this topic, please see "Update: Gaopeng to Merge with FTuan," MD 6/21/12 issue.
Keywords: revenue Internet IPO Tencent 0700.HK Groupon Lin Ning Ftuan Gaopeng Gao Xia group buying M&A QQ Tuan
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