You are here
Alibaba, finance affiliate buy HK firm for China lotteries
[HONG KONG] Alibaba Group Holding Ltd and its main financial affiliate will spend HK$2.39 billion (S$424.3 million) buying control of Hong Kong-listed AGTech Holdings Ltd to boost its lottery business in China.
Ali Fortune Investment Holding Ltd, a company majority- owned by China's largest online retailer, agreed to buy HK$1.68 billion of shares and HK$712.6 million of convertible bonds in AGTech. It will own about 59.45 per cent of the company upon full conversion, according to a filing Sunday to the Hong Kong stock exchange.
The acquisition marks the return of China's e-commerce leader to the lucrative Chinese lottery businesses, after suspending operations due to increasingly onerous government restrictions.
AGTech, which runs lotteries in multiple provinces in China, will expand its games, hardware, and distribution across the country, the company said. China's lottery business, which is strictly regulated by the government, had a participation rate of about 7.5 per cent in 2013, compared with 56 per cent in Hong Kong for 2012, showing potential for growth, the company said.
Alibaba and its affiliate will help AGTech with cloud computing, the company said in an e-mailed statement on Monday. Shares in the Hong Kong-listed company fell 2 per cent to HK$1.95 as of 10 a.m. local time.
Ali Fortune is 60 per cent owned by Alibaba and 40 per cent owned by Alipay-operator Zhejiang Ant Small & Micro Financial Services Group, also known as Ant Financial.
Alibaba's earnings ended September were hurt by the suspension of its lottery business since late February last year due to regulation restrictions, the company said during n conference call in October.