Chinese e-commerce juggernaut Alibaba (BABA) announced Friday that it has submitted a bid to acquire Chinese YouTube-like video service Youku Tudou. The all-cash deal valued Youku Tudou at $5.2 billion.
Alibaba, which in 2014 had previously invested $1.2 billion for an 18% share in the video site, said in a release that it offered to pay $26.60 per remaining Youku Tudou (YOKU) share, or roughly $3.6 billion, representing a 30% markup on the current value of the company’s shares.
Youku Tudou was born from the 2012 merger of Chinese video companies Youku and Tudou. The company says it serves over 500 million users per month, which is around half of the usage of Google-owned YouTube (GOOG) per month. Youku Tudou also faces competition from Chinese internet giants Baidu and Tencent.
Youku Tudou bolsters Alibaba’s ambitions to expand its internet empire from e-commerce and cloud computing into video. Alibaba had previously offered a Netflix-like streaming service to its users. In turn, Alibaba also sees an opportunity to help Youku Tudou monetize its massive audience using Alibaba’s advertising services.
Alibaba also just invested $4.63 billion in Chinese consumer electronics chain Suning Commerce Group to deepen its bet into online-to-offline commerce.
For more on Alibaba’s streaming video ambitions, watch this video:
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