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Alibaba buys $1B controlling stake in Lazada

Alibaba buys $1B controlling stake in Lazada
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In their largest international deal yet, Chinese e-commerce giant Alibaba has agreed to buy a $1 billion controlling stake in Lazada, one of the largest online retailers in Southeast Asia.

Lazada currently operates in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, offering a wide range of products such as apparel and consumer electronics. Alibaba saw the potential of the Southeast Asian market for its operation expansion, and moved to capitalize on Lazada’s predicted growth in the region.

“With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for eCommerce globally,” said Alibaba President Michael Evans said in the company’s press release.

Under the deal, Alibaba will buy around $500 million worth of newly issued shares in Lazada, as well as acquire shares from some existing shareholders.

Lazada Group CEO Max Bittner is very optimistic with the agreement, saying: “We are very excited about joining forces with Alibaba and see significant synergies that will drive great benefits to our customers in Southeast Asia.”

“The transaction will help us to accelerate our goal to provide the 560 million consumers in the region access to the broadest and most unique assortment of products. Furthermore, leveraging Alibaba’s unique knowhow and technology will allow us to rapidly improve our services and provide an even more effortless shopping and selling experience,” Bittner added.

The deal includes a provision for Alibaba to acquire much of the rest of the Lazada’s remaining stake at fair market value during the 12 to 18 month period after the closing of the transaction.

Words John Sosmeña

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