Alibaba Acquires UCWeb, Maker Of China’s Most Popular Mobile Browser

Alibaba, already an investor in UCWeb, will buy all remaining shares of the web browser and search company. The two firms announced the merger, one of the most significant among Chinese Internet companies to date, earlier today. UCWeb will join UC Mobile, one of Alibaba’s business unit as Alibaba preps for its U.S. IPO. Though Alibaba did not disclose how much the deal is worth, it did say that it is worth more than the $1.9 billion paid for 91 Wireless by Baidu last year, formerly the biggest deal in China’s Internet sector.

In a statement, the companies said “The move highlights the comprehensive integration of Alibaba and UCWeb following Alibaba’s investment in UCWeb in 2009 and 2013, and will enables deeper synergies between the companies by marrying Alibaba’s strengths in e-commerce, cloud computing and big data technology and UCWeb’s leading market position and technology in mobile.”

UC Mobile will oversee Alibaba’s browser, mobile search, location-based services, mobile gaming, app store and mobile reader operations.

UCWeb is one of the biggest web browser companies in China, with more than 50% market share. It also surpassed Opera as the top mobile browser in India last year, when Alibaba founder and chairman Jack Ma joined UCWeb’s board of directors, and now holds a 35% market share according to StatCounter, compared to Opera’s 25%.

Before the merger, Alibaba already held a 66% stake in UCWeb in convertible preferred shares, according to its SEC filings and also participated in several fundraising shares. Its total carrying amount in UCWeb was RMB3,358 million, or about $540 million.

The move is significant because it builds up Alibaba’s mobile strategy, making it a more formidable competitor to other Chinese companies like Baidu, which reportedly tried to buy UCWeb in June 2012, and Tencent. It may also mean that Alibaba plans to strengthen its presence in India and other emerging markets. UCWeb named India as its second headquarter in April 2013, while UC Browser has grown worldwide by forming partnerships with phone makers including HTC, Samsung, Nokia, LG, Lenovo, and carriers such as Vodafone, China Mobile, and China Telecom.

Before selling a controlling interest to Alibaba, UCWeb had planned go public in the U.S. according to TechNode, our partner site in China, but it may have scuttled those plans as smartphone users began spending more times in apps instead of their mobile browsers. On Alibaba’s end, UCWeb will be able to develop browsers and other tech it needs for its smart TV ecosystem and e-commerce businesses.