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Private Investors Acquire 5% Stake in Alibaba Group for USD 1.6 Bln

China News, 9/23/11

Chinese e-commerce conglomerate Alibaba Group has secured USD 1.6 bln in investment from multiple investors in exchange for existing shares held by company employees representing a 5% stake. The investors include global IT private investment firm Silver Lake, Russian investment group Digital Sky Technologies (DST), and the Yunfeng Fund initiated by David Feng Yu, Alibaba Group chairman Jack Ma, and Giant Interactive (NYSE: GA) chairman Shi Yuzhu. Singapore's Temasek Holdings is also participating in a lesser capacity. The deal values Alibaba Group at USD 32 bln.

According to the Wall Street Journal's digital media blog, the deal had been in talks for some time and is intended to enable the majority of Alibaba employees to convert their shares.

DST and Silver Lake will reportedly transfer their voting rights to Alibaba management in order to avoid regulatory obstacles regarding foreign ownership. The funding implies that Alibaba has no intentions to IPO in the near future, according to one industry source.

Yahoo was reportedly already aware that DST was leading a round of private investment in Alibaba Group. Under the new valuation, Yahoo's 39% stake is valued at USD 12.5 bln.

Editor's Note: In a separate statement, Chinese online game developer and operator Giant Interactive (NYSE: GA) announced that it has committed to invest USD 50 mln in Alibaba Group via the Yunfeng Fund. The deal is expected to close before the end of December 2011.

Keywords: David Feng Yu Giant Interactive Jack Ma Shi Yuzhu e-commerce Internet IPO funding valuation GA private investment Silver Lake Temasek Yahoo Alibaba Group Yunfeng Fund HR Digital Sky Technology


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