March 12, 2014 / 12:50 AM / 6 years ago

Alibaba to buy control of ChinaVision for $804 mln

HONG KONG, March 12 (Reuters) - China’s largest e-commerce company Alibaba Group Holding has agreed to buy a controlling stake in ChinaVision Media Group Ltd for HK$6.24 billion ($804 million) as competition in the Internet sector heats up.

A unit of Alibaba has agreed to buy 12.49 billion new shares, representing 60 percent of the enlarged share capital of ChinaVision at HK$0.50 apiece.

That represents a discount of about 20.6 percent to its previous stock close, the supplier of television programme services said.

ChinaVision, which has a market capitalisation of $686 million, said the net proceeds of the deal would be used for general working capital and for investments when opportunities arise.

ChinaVision and Alibaba will establish a strategic committee to explore future opportunities in online entertainment and media-related areas.

Trading in shares of ChinaVision, which was suspended on Feb. 25, will resume on Wednesday.

Tencent Holdings’ stake in ChinaVision will be diluted to 3.2 percent from 8 percent on completion of the issue.

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