Baidu, Alibaba, Tencent, JD, & Xiaomi M&A Matrix - Q2 2018
A heavy focus on ecosystem development and, increasingly, on overseas expansion has fueled aggressive M&A strategies among China's dominant Internet companies: Baidu, Alibaba, Tencent, JD.com, and Xiaomi (collectively, "BATJX"). BATJX acquisitions previously comprised mainly Internet and mobile service firms, but have expanded in scope to include areas such as offline retail, logistics, hardware, financial services, TV and film production, newspaper publishing, property management, sports teams, and cosmetics brands. The BATJX M&A race continues to change the competitive positioning of each of the acquiring companies, and is also providing many target companies a lucrative, early exit option compared to the longer time frame and less certain prospects of an IPO.
To help investors and tech industry enterprises better understand what acquisitions each of the BATJX firms has made over the last 25 quarters, how these deals fit in to each acquirer's ecosystem strategy and improve its overall competitiveness, and what firms, based on the remaining holes in each Baidu, Alibaba, Tencent, JD.com, and Xiaomi's respective ecosystems, are most likely to be the target of future acquisitions, Marbridge has developed the Baidu, Alibaba, Tencent, JD, and Xiaomi M&A Matrix.
The Q2 2018 edition of the Matrix covers all major confirmed and rumored BATJX acquisitions (both minority and majority stakes) revealed over the 25-quarter period ending June 30, 2018, as well as a selection of particularly significant M&A deals preceding that period, in Excel (read-only) format. Note that the Q2 2018 issue of the Matrix, for reference, continues to cover Qihoo 360. For each portfolio firm, the Matrix provides the following information:
- Company Name
- Business Scope
- Country (if not mainland China)
- Ticker Symbol (if applicable)
- Stake Acquired (where known)
- Acquisition Price (where known)
- Date of Acquisition / Rumor of Acquisition
- Type of Investment (e.g. Series A, pre-IPO Funding, JV, Post-IPO Stake)
- Reference Article in Marbridge Daily
The Baidu, Alibaba, Tencent, JD, and Xiaomi M&A Matrix covers approximately the following number of deals (multiple investments in the same target company are detailed separately, but here are counted as a single deal):
- Baidu: 160
- Alibaba: 360
- Tencent: 380
- JD.com: 110
- Xiaomi: 180
- Qihoo 360: 65
The Matrix also includes acquisitions made not directly by a BATJX company, but instead made independently by one of their CEOs/Chairmen or an investment fund controlled by one of their CEOs/Chairmen (e.g. Xiaomi CEO Lei Jun's Shunwei Capital or Alibaba Chairman Jack Ma's Yunfeng Capital), and key joint ventures.
During Q2 2018, Tencent and Alibaba both maintained an aggressive scorecard of new acquisitions, followed by Baidu and JD.com, which each had one of their most active quarters to date for new deals. Xiaomi/Shunwei sustained a pace similar to that of many quarters over the past several years, and Qihoo made a handful of strategic investments. While acquisitions spanned a variety of different sectors, e-commerce was a major focal point during the quarter, followed by smart devices, financial services, artificial intelligence, and entertainment media. Also of note were healthcare, transportation, enterprise services, gaming, education, big data, security, advertising, logistics, and cloud services.
The ratio of overseas deals to total deals during Q2 2018 remained roughly the same as that in the previous two quarters, with approximately one-sixth of the new deals covered in this edition of the Matrix comprising investments in overseas firms, concentrated most heavily in India and North America, but with several deals in Southeast Asia, Europe, and other regions.
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