E-commerce powerhouse Alibaba Group Holding has agreed to pay US$3.67 billion for the shares that it does not own in Youku Tudou, the mainland's leading online video services provider, and take the New York-listed company private.
"We believe this combination with Alibaba maximises value for Youku Tudou shareholders and significantly benefits our customers, users and team," said Victor Koo Wing-cheung, the chairman and chief executive of Beijing-based Youku.
For Alibaba, the world's largest e-commerce services provider, taking over Youku formed part of its grand plan to become a leading competitor in the mainland's fast-growing digital entertainment market.
In a joint statement on Friday, the two companies said the all-cash transaction involved paying Youku US$27.60 per American depositary share, which represents 18 ordinary shares.
The acquisition cost represents a premium of 35.1 per cent to the stock's closing price on October 15, a day before Youku announced it had received a "going private" proposal from Hangzhou-based Alibaba.
Youku's board of directors unanimously approved the deal based on the recommendation of an independent special committee that reviewed the buyout proposal.
The board has, in turn, recommended Youku shareholders vote for the merger.