BEIJING/HANGZHOU, June 11 (Xinhua) -- Alibaba Group, China's largest e-commerce company, on Wednesday announced it will purchase UCWeb, a provider of mobile Internet software and services.
Although the two sides did not reveal the value of the deal, the merger is expected to be the largest in China's Internet business.
The previous record was set last August when Nasdaq-listed Baidu Inc. closed a 1.9-billion-U.S.-dollar deal to acquire 91 Wireless Websoft, a major distributor of Chinese smartphone applications.
UCWeb board chairman Yu Yongfu, who will act as president of Alibaba's future UC mobile platform, said the valuation of the Alibaba-UCWeb merger far exceeds the one set by Baidu, China's most popular search engine.
The valuation of the deal will be largely determined by the stock value of Alibaba, which filed its IPO in the United States on May 6. It is expected to be the world's largest stock listing since Facebook's 16-billion-U.S.-dollar offering in 2012.
Alibaba currently holds 66 percent of UCWeb's stake with a total investment worth 686 million U.S. dollars.
Alibaba founder and chairman Jack Ma said in a letter to the company's staff on Wednesday that the merger deal was agreed because both Alibaba and UCWeb believe that the time of information technology is being replaced by the age of "data technology," which is inspired by activating creativity.
The merger is expected to present a challenge to Baidu, as UCWeb's UC Browser is the world's most popular mobile browser, boasting 5 million users. Founded in 2004, the company is one of China's earliest Internet firms specialized in mobile services.
The 15-year-old Alibaba is the world's largest online and mobile commerce company. It had a gross merchandise volume of 248 billion U.S. dollars in 2013 on its three major trading platforms.
In addition to the online retail and wholesale business, it provides cloud computing services, and is the world's largest payment processor with a payment volume of 519 billion U.S. dollars in 2013.