Alibaba, China’s largest e-commerce firm owned 24% by Yahoo (NASDAQ:YHOO), offered to buy digital mapping company AutoNavi (NASDAQ:AMAP) on Monday for $1.45 billion.
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The take-private transaction, valued at $21 an American depository share, represents a premium of roughly 27% to AutoNavi’s closing price on Friday.
The offer would enable Alibaba to scoop up the remaining 72% of the company it does not already own as it seeks to diversify its portfolio to better compete with rivals like Tencent and Baidu. It acquired the initial 28% stake in AutoNavi last May.
The e-commerce giant highlighted the “increasingly challenging” digital mapping marketplace and said a full combination would enable the two to benefit from combined strategies and synergies.
“We believe our proposal provides an extremely attractive opportunity for AutoNavi’s shareholders to realize superior value that is otherwise difficult to achieve as a stand-alone company,” Alibaba said in a statement.
Shares of AutoNavi, which provides mapping and location-based services in China, climbed more than 26% to $20.87 in recent trade.
Alibaba, expected to go public in the U.S. later this year, plans to fund the transaction using cash on hand. It believes a deal would close quickly due to its familiarity with AutoNavi's operations.
The digital mapping company said Monday it will form a committee of independent financial and legal advisers to evaluate the offer.