58.com, a Chinese online classifieds market announced on Friday that it has acquired astrategic stake in one of its competitors, Ganji Inc.
It has agreed to acquire a 43.2 percent fully diluted stake in Ganji, including 34 million in stockshares and $412.2 million in cash, according to the company’s statement.
Yang Haoyong, the founder of Ganji.com, will become one of the co-chief executives alongwith Yao Jinbo, founder of 58.com.
The new combined group is expected to be valued at as much as $10 billion, according to aFinancial Times report published on Wednesday.
The newspaper wrote that both sides have signed a memorandum of understanding in Beijingon March 14, citing people familiar with the matter.
The two online companies provide a range of online advertising listings including job adverts,housing and used goods trading. According to the report, currently 58.com is about twice asbig as Ganji.com in terms of market value.
58.com is one of Chinese largest online classified marketplaces. It has acquired Shanghai–based real estate Internet platform Anjuke Inc in stock and cash valued at $267 million lastmonth.
According to the CEO Yao, 58.com aims to be the biggest real estate market informationprovider by users and revenue.
Ganji Inc, the online and mobile-based classified advertising operator received $200 millioninvestment from global alternative asset manager Carlyle Group LP last August.
ChinaDaily
By joining forces, the two are expected to reduce marketing costs substantially, thenewspaper wrote.