Reuters reports Alibaba agrees to sell Lingxi Games to Trustar Capital for over $2 billion
This digest was compiled by AI from multiple sources — links to the originals are below.
Alibaba has reached a formal agreement to sell its game developer unit Lingxi Games to private equity firm Trustar Capital, according to an internal memo reviewed by Reuters. A person familiar with the matter said Alibaba is expected to reap more than $2 billion from the sale, while Bloomberg News and The Wall Street Journal reported the deal at at least $1.5 billion. The divestiture comes as Alibaba focuses resources on artificial intelligence and cloud computing.
Key Facts
- Lingxi Games CEO Zhou Bingshu told staff in an internal memo that he and the management team would continue to lead the company after Alibaba transfers its entire Lingxi stake to Trustar Capital.
- The internal memo reviewed by Reuters did not disclose the deal value or when the transaction was expected to close, and gave no details on regulatory approvals or other conditions.
- Bloomberg News and The Wall Street Journal reported the transaction value at at least $1.5 billion, citing sources.
- Alibaba has been reviewing non-core assets as it directs capital and management attention toward artificial intelligence and cloud.
- Alibaba shares rose 2.6% in Hong Kong trading on Monday.
The Sale Agreement
Alibaba and Trustar Capital reached a formal agreement after several rounds of talks, according to an internal memo sent to Lingxi staff on Monday by CEO Zhou Bingshu and reviewed by Reuters. Under the agreement, Alibaba will transfer all of its Lingxi stake to Trustar Capital. The memo did not disclose the deal value or when the transaction was expected to close, and gave no details on regulatory approvals or other conditions. Zhou said he and Lingxi's management team would continue to lead the company, signalling continuity in the studio's operations following the ownership change.
Alibaba's Asset Review
Alibaba, one of China's largest technology companies, operates e-commerce platforms, cloud-computing services and other digital businesses. It has been reviewing non-core assets as it directs capital and management attention toward strategic priorities including AI and cloud. The Chinese tech company had been seeking a buyer for Lingxi for some time, according to two separate sources familiar with the matter. Trustar, formerly known as CITIC Capital, is an Asia-focused private equity firm that has the industry resources and operational expertise to support Lingxi's next stage of development, according to Zhou.
Lingxi Portfolio and Market Reaction
Guangzhou-based Lingxi Games is best known for 'Three Kingdoms: Strategy Edition', a multiplayer strategy title based on China's Three Kingdoms era. The game was developed in collaboration with Japan's Koei Tecmo Holdings, whose franchises include 'Romance of the Three Kingdoms' and 'Nobunaga's Ambition'. Lingxi was founded in 2013 and acquired by Alibaba in 2017, specializing in multiplayer strategy and card games. Alibaba shares rose 2.6% in Hong Kong trading on Monday.
3 sources
Reuters reports Alibaba agrees to sell Lingxi Games to Trustar Capital for over $2 billion
