After weeks of media reports, Alibaba may finally be nearing an agreement to acquire NetEase’s cross-border e-commerce unit, Kaola. Chinese tech news website 36kr reports that a deal may be announced as early as this week and is expected to be worth $2 billion in cash and shares.
Kaola will continue to run independently, but would become part of Alibaba’s Tmall Global, creating a massive cross-border e-commerce business. At the end of last year, Tmall Global held a 31.7% share of the market, while Kaola had about 24.5%, much larger than rivals JD Worldwide (11.5%), VIP International (9.7%) and Amazon (6%).
Caixin Global first reported that Alibaba was planning to acquire Kaola for $2 billion in cash on August 15, but then the deal was reportedly called off after the companies disagreed on the price and other details.
36kr reports that Kaola employee stock options will be converted into Alibaba shares and that even though the brand will remain independent, Alibaba will put a new CEO in place, replacing current Kaola head Zhang Lei.
An Alibaba spokesperson said the company does not comment on market rumors. NetEase had no comment.
Alibaba is also expected to invest in NetEast Cloud Music, but that deal is unrelated to the Kaola acquisition.