The Chinese Alibaba group has hit the jackpot. Not only has it acquired a major share in the electronic navigation tools maker AutoNavi, but as a stakeholder of 20% to 30% it has taken a huge chunk out of the firm. The graph for the Chinese is quite certainly on the rise.
The Alibaba group, which is an Internet colossus of Chinese origin, has just gained acquisition of about one third of the stakes in AutoNavi, a navigation tool-making company. The news according to Tech Sina may just be a rumor for now yet Alibaba is said to officially announce this decision on Monday. A spokesperson declined to make any further comments on the matter. What goes on within board room meetings stays within board room meetings.
Alibaba seems to have pushed out the CEO of AutoNavi, Jun Hou who was previously the major shareholder. In the capacity of the most widely employed navigation service in China, AutoNavi is the possessor of a mobile mapping app that is used by a hundred million people. And as an e-commerce elitist, Alibaba was already into the game of buying big pieces of intellectual property. With this merger in the air, it seems the deal will pay off quite handsomely.
When you look at the statistics of the deal it figures. Alibaba already is a force to be reckoned with. It makes more in monetary terms than Ebay and Amazon both. In fact, it wouldn’t come as much of a surprise that Alibaba equals other giants such as Facebook with its valuable assets which are worth at least a $100 billion. Alibaba is keeping mum regarding the deal though.
The main reason for this taciturn behavior in matters of speech is some of its other commitments which it has to look to on an urgent basis. Preparations for Taobao’s ten year anniversary are an alibi that Alibaba has. Alibaba’s Taobao service has made a name for itself in map navigation. With this acquisition, the service can be fortified even more. Things are looking up for Alibaba and the staff can expect raises in the future.
The science of mergers and acquisitions are a fundamental part of the business world. When companies see themselves going down they start selling their shares in a desperate bid to gain the necessary profits to restart a business afresh. But the market climate is so unpredictable that there is simply no guarantee that winners will keep winning and that the losers would lose no matter what. Rather there are a few surprises in store for those who like to make predictions. The future simply contains too many variables to be subject to planning or prophecies.