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BREAKING NEWS
Source: Thailand Startup News  Sep 05, 2019

Startup Kaola Up For Acqusition For About US$ 2.1 Billion

Startup Kaola Up For Acqusition For About US$ 2.1 Billion
Source: Thailand Startup News  Sep 05, 2019
Startup Kaola, the crossborder retail platform of NetEase is reportedly to be acquired by Alibaba to the tune of US$2.1 billion.  After weeks of rumours speculating in the market, the deal is to be closed shortly before the end of the month. Thailand Startup News was not able to get details nor comments from the spokespersons of Alibaba and NetEase.


NetEasewas founded in 1997 by William Ding, the company offers online game services, advertising services, and wireless value-added services throughout China. Through its subsidiaries, NetEase engages in online games, internet portals, e-mail, and a multitude of wireless value-added service businesses in China.
 
Kaola is NetEase’s self-operated cross-border e-commerce platform startup with also  online video broadcasting services and insurance products.
 
The cross-border eCommerce market in China hit US$1.2 trillion in transactions in the first three months  of 2019, according to industry reports. NetEase has been looking to sell its eCommerce unit for most of the 2019. Earlier this year, Amazon was looking at the platform before it decided to close its Chinese online store.
 
As part of the acquisition package, Kaola will merge with Alibaba’s Tmall Global while still operating independently to create a massive cross-border eCommerce business. At the end of last year, Tmall Global held a 31.7 percent share of the market, while Kaola had about 24.5 percent, much larger than rivals JD Worldwide which owns 11.5 and Amazon with only 6 percent.
 
The US$2.1 billion acquisition will include a mix of cash and shares. The options held by Kaola employees will also be converted to Alibaba shares, according to reports, citing people familiar with the deal. 
 
Alibaba reportedly will install a new CEO to replace Kaola’s MD. Mr  Zhang Lei. Kaola employee stock options will be converted into Alibaba shares.
 
Chinese media, Caixin Global first reported Alibaba’s Kaola acquisition for US$2.0 billion in cash in mid August but the deal apparently fell apart during negotiations. The revived negotiations beginning in September, concluded in a win-win situation for both parties hence the acquisition progressing which is expected to be finished formally before the end of September.