HONG KONG — Alibaba is taking a bigger stake in Southeast Asian e-commerce platform Lazada, plowing in approximately $1 billion to increase its share from 51 percent to approximately 83 percent, it said Wednesday.
“This transaction demonstrates the continued success of Lazada’s business, Alibaba’s confidence in the growth potential of the Southeast Asian markets and its commitment to the region as part of its global strategy,” Alibaba said in a statement.
The Chinese tech giant will purchase shares of certain Lazada shareholders at an implied valuation of $3.15 billion for the company, “reflecting a significant increase in the value of Lazada since Alibaba first acquired its majority stake in April 2016.”
The transaction will increase Alibaba’s total investment in Lazada to more than $2 billion. Lazada will continue to operate under its own brand name.
“Globalization is at the core of Alibaba’s strategy to reach 1 trillion [dollars] in GMV over the next three years and the company is betting big on Lazada to develop its Southeast Asia opportunity,” Kiril Popov, senior analyst at Fung Global Retail & Technology said.
“The additional investment of $1 billion in Lazada is not a surprise as Alibaba has followed a phased-in approach with respect to some of its past acquisitions,” Popov added. “According to Alibaba’s leadership, this approach allows the company to align its incentives with the target’s management team and find the best way to work together.
“On the one hand, the timing of the additional investment only shows that Lazada’s integration is moving along well and that Alibaba has seen enough to double-down on the company. On the other hand, the move can be seen as a response to JD.com’s announcement that it plans to enter the Thai market by the end of the year.”
Shares of Yoox Net-a-porter Group rose this week on the rumors that Alibaba was considering taking a stake in the luxury fashion e-tailer.
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