Ali Koala $2 Billion Acquisition Of The Upcoming Delivery Of Koala CEO Confirmed

In September 4th, 36 krypton learned from the core of close transactions that Alibaba's acquisition of NetEase koala transaction has come to an end and will be delivered within this week. The amount of the transaction is consistent with the $2 billion previously reported by Caixin (the current price of RMB 14 billion 300 million yuan), but not all cash transactions. The Alibaba is likely to pay part of the stock plus some cash, and the other is part of the assets plus some cash in the form of delivery. NetEase koala's employee stock options will also be converted into Alibaba shares accordingly. 36 krypton has confirmed to Alibaba and NetEase that both sides have declined to comment.

After the completion of the transaction, NetEase koala will be included in the Tmall import and export division, and the brand will remain unchanged. As Ding Lei promised in August 20th to conciliate the middle level of NetEase koala, the layoffs will not happen in the short term, and the NetEase koala will remain independent for a period of time. However, Alibaba will send a senior executive to CEO, a former NetEase official. It has been reported that Zhang Lei, CEO, has been dismissed from the company, which was denied by NetEase last month. In addition, NetEase Kola insider told 36 krypton that the future NetEase koala CEO may be Liu Yiman, senior director of Tmall International Commodity Center, and Liu Yi man now reports to Liu Peng, general manager of Tmall import and export division.

At the same time, Alibaba's investment in NetEase's cloud music will also take place. The long rumored transaction will soon be settled. Although the transaction time is similar, according to 36 krypton, Alibaba's investment in NetEase's cloud music is not directly related to the acquisition of NetEase koala. It does not belong to the terms of exchange for the acquisition.

Although Alibaba has shrimp music, shrimp music has been on the edge of competition for a long time. In the "China Mobile Internet 2019 spring big report" released by Questmobile, the top four music App live months were captured by Tencent Department App, such as QQ music and cool dog music, NetEase cloud music ranked fifth, with a higher growth rate to narrow the distance from the top four. In 2019 Q2 earnings conference, NetEase revealed that the number of users of cloud music has broken 800 million, and completed two rounds of financing of NetEase cloud music has been listed.

For a Alibaba who can't afford music and can't afford to give up the traffic, it's logical to see Internet easy music. Unlike NetEase koala, negotiations with NetEase's cloud music should focus on investment rather than mergers and acquisitions.

Because the two Alibaba, NetEase two giant companies, NetEase koala acquisition process can be said to be twists and turns. 36 krypton learned that many competitors had joined the auction earlier this year, but soon quit. Alibaba is the only buyer who has a starting price and has experience in electricity supplier operation.

Did 36 krypton become a shareholder in mergers and acquisitions? Ali has taken the koala's ambition has been unable to hide "in the article analysis, although the profit pressure is bigger, but NetEase koala annual revenue has reached 10 billion scale. According to the report of the third party consulting company, according to Analysys, NetEase koala ranks second in terms of market share and half of the market share with Tmall international. It is two times the third sea hoarding global (i.e., the East China Sea outsourcing).

The price of $2 billion, one of the prerequisites is that NetEase's electricity business profitability and revenue growth are not optimistic at the moment. Whether online expansion or offline expansion, NetEase koala needs strong cash flow to support it. NetEase's business philosophy does not support rapid growth in exchange for losses.

The industry is puzzled by the acquisition: Alibaba itself is a strong electricity supplier business company, NetEase's koala resources and capabilities, Alibaba itself can do it, why buy it?

For Alibaba, $2 billion is an affordable price. Compared with Jingdong and many other competitors, Alibaba has more money in hand. The first quarter of 2019 showed that under the non US general accounting standards, Alibaba's net profit reached 30 billion 949 million yuan, an increase of 54% over the same period, much higher than that of Bloomberg.

In November 2018, the first advance fair was held in Shanghai. Alibaba CEO Zhang Yong announced that Alibaba will complete a huge import purchase order of US $200 billion in the next five years. In order to fulfill this commitment, Alibaba must play a more important role in cross-border retail business. Once Alibaba completes the acquisition of koala, NetEase will get more than half of its absolute share advantage in the cross-border electricity market, which will be more convenient for the industry to control and consolidate.

The acquisition will weaken the intensity of competition to a certain extent. NetEase koala's market share in Hai Tao is second only to Tmall international, while Hai Tao's best selling products are mainly standard products with transparent prices, and many companies compete for profit. But this acquisition is not enough to form monopoly.

On the other hand, many strategies rely on billions of subsidies to expand to a second tier city market. Hai Tao is also an important part of this rising market. Alibaba's acquisition of NetEase koala also plays a strategic role.