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Alibaba Group Holding Ltd. has completed the buyout of Chinese streaming video giant Youku Tudou, the companies announced on Tuesday, some six months after the e-commerce behemoth proposed the acquisition in October 2015.
The deal was approved by Youku Tudou shareholders in March.
Youku Tudou had traded on the New York Stock Exchange since 2010. Shareholders received $27.60 per American depositary share (ADS) in the buyout, which values the streaming video company at $4.2 billion. The price tag resulted in Alibaba paying about $3.67 billion in cash, since it had already owned 18.3 percent of Youku Tudou’s shares prior to the agreement.
Youku Tudou, often dubbed “China’s YouTube,” commands a 21 percent share of the growing and fiercely contested Chinese online video market.
Alibaba, lead by Chinese billionaire Jack Ma, is expected to seek synergies between the service and its core e-commerce business — a strategy that U.S. e-commerce giant Amazon has pursued with in-house streaming video offerings for its Prime customers. The streaming video piece will also compliment Alibaba’s ambitious film business subsidiary, Alibaba Pictures Group.
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