China's Alibaba Selling Stake in Online Ticketing Service Meituan-Dianping for $900M

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Alibaba also reports higher quarterly earnings.

Chinese e-commerce giant Alibaba Group has reached a deal to sell its stake in Meituan-Dianping, China’s largest online movie ticketing service, for approximately $900 million. 

Alibaba has agreed to offload its stake to a group of private investors, individuals familiar with the deal told The Wall Street Journal. Some of those investors were participants in Meituan-Dianping's recent $3.3 billion fundraising round.

Alibaba on Thursday also reported its financials for the quarter ending on Dec. 31, 2015. Revenue rose 32 percent to $5.33 billion. Earnings of $1.92 billion were up 108 percent, including a gain from the sale of the company’s movie-related businesses to its separately listed Alibaba Pictures.

Meituan-Dianping is China's leading digital vendor of movie tickets, concert tickets, restaurant bookings and other online-to-offline lifestyle services. The company was formed by a merger of two startups last year. Alibaba was an early investor in Meituan, while rival Internet giant Tencent was a backer of Dianping — their multi-billion dollar tie-up resulted in the two fiercely competitive Chinese Internet titans holding a stake in the same company. It is believed that Alibaba was interested in selling for some time. 

According to the Journal, the investors who bought Alibaba’s stake paid a discounted price that values Meituan-Dianping at $12.5 billion, significantly less than the $15 billion valuation put on the company during its latest funding round.

Alibaba's entertainment subsidiary, Alibaba Pictures, runs its own mobile movie ticketing service, Tabao Movie.

Meituan-Dianping, with services resembling Yelp, Groupon and Fandango rolled into one, said this week that its total transaction volume hit $25.8 billion (170 billion yuan) in 2015.

Online movie ticket buying in China has exploded in lockstep with the rapid expansion of the country's box office, which grew 48.7 percent last year. An impressive 68.2 percent of all gross box office in China now comes from online ticket purchases, up from less than 50 percent at the end of 2014, according to a study from iiMedia Research. In North America, less than 20 percent of movie tickets are sold online. 

Meituan-Dianping's movie ticketing service, Maoyan, was the market leader last year with a market share of 23.5 percent, followed by Baidu's service Nuomi at 19.2 percent, Weipiao (backed by Tencent and Wanda) at 13.1 percent and Taobao Movie with 9.3 percent.

The Hollywood Reporter has reached out to Alibaba Group for comment. 

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