Alibaba invests US$500mil in Lazada, buys 9.1% stake for US$137mil
By Digital News Asia April 12, 2016
- Alibaba will become Lazada’s new controlling shareholder
- Rocket Internet retains a fully diluted stake after the transaction
ROCKET Internet said it has agreed to sell a 9.1% stake, on a fully diluted basis, in its e-commerce company Lazada to China’s Alibaba for US$137 million.
Lazada and Alibaba also entered into a transaction that includes Alibaba’s investment of US$500 million in Lazada. Alibaba will become the controlling shareholder of Lazada after the transaction.
The transaction equates to an equity valuation of Lazada of US$1.5 billion, Rocket Internet said in a statement.
Rocket Internet’s remaining fully diluted stake after the transaction and taking into account Alibaba’s investment of new funds is 8.8%.
Founded in 2012, Lazada operates a network of e-commerce portals across six South-East Asian markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
“We are very excited about joining forces with Alibaba and see significant synergies that will drive great benefits to our customers, sellers, brands and the broader e-commerce ecosystem in South-East Asia,” said Lazada chief executive officer Maximilian Bittner (pic).
“The transaction will help us to accelerate our goal to provide the 550 million consumers in the region access to the broadest and most unique assortment range,” he added.
The valuation of Rocket Internet’s stake represents approximately 15x Rocket Internet’s total invested capital of €18 million (US$21 million).
Shareholders, including Rocket Internet, have also entered into a put-call arrangement with Alibaba, giving the buyer the right to purchase, and the shareholders the right to sell collectively, their remaining stakes at fair market value within the 12-18 month period after the transaction is closed.
“This transaction is a key milestone for Lazada as it underlines its position as a leading online platform in South-East Asia,” said Rocket Internet chief executive officer Oliver Samwer.
“Alibaba as the new major shareholder is further strengthening this position and provides the basis for significant future growth given its strong strategic position in the region,” he added.
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