Alibaba, Yunfeng invest $1.2b in Youku Tudou

Yunfeng is a private equity firm co-founded by Jack Ma, Alibaba's executive chairman.

According to a regulatory filing, the investors will buy 707 million new shares and 13.9 million existing Class A ordinary shares at $30.50 per American Depositary Share (ADS). Each ADS represents 18 Class A ordinary shares. The purchase will give Alibaba a 16.5% stake in Youku Tudou, while Yunfeng will have about 2%.

Jonathan Lu, Alibaba's CEO, will join Youku Tudou's board of directors.

"We are excited to cooperate and work closely with Victor and his team to support their innovation in this key emerging space as well as accelerate our digital entertainment and video content strategy," Ma said in the statement.

"This is an important strategic initiative that will further extend the Alibaba ecosystem and bring new products and services to Alibaba's customers."

Youku and Tudou, China's leading online video companies - both of which were US-listed - merged in a 100% stock-to-stock transaction worth over $1 billion in 2012. The combined entity took a more than 35% share of the country's online video business.

China's online video market sales rose 42% year-on-year to RMB12.8 billion in 2013, accoriding to iResearch.

Goldman Sachs served as Youku Tudou's financial advisor on the deal, while Morgan Stanley Asia worked with Alibaba.

Yunfeng is raising around $1 billion for its second fund. A first close of $600 million came last year and a final close will take place no later than June.

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• Topics
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