Alibaba
is in talks with India’s Micromax Informatics to buy an about 20
percent stake in the smartphone maker, helping the Chinese e-commerce
giant expand in one of the world’s fastest growing markets for the
devices, several people with direct knowledge of the matter said.
The
deal, if completed, would see Alibaba investing as much as $1.2 billion
in Micromax, the second-largest smartphone brand in India by sales, and
would value the company at up to $6 billion, two of the people said.
India is the world’s third largest smartphone market and was the fastest
growing in the Asia Pacific region in the third quarter of last year,
according to industry research firm International Data Corporation.
Micromax
and Alibaba began talks on the stake sale after discussions with
investors led by Japanese telecoms firm Softbank Corp stalled over
differences in valuations, the sources said.
“The
Softbank talks are not officially over, but it’ll be hard to get back
on track,” said one of the people. Softbank is the largest shareholder
in Alibaba.
All
the sources involved in the process declined to be named as they were
not authorised to speak to the media about ongoing talks. Micromax,
SoftBank and Alibaba declined to comment. The sources said Alibaba wants
to use the Micromax deal to tap into the boom in the number of internet
users in India, which is also one of the world’s most rapidly growing
smartphone markets.
Growth
in India, and especially in mobile transactions, would help Alibaba
offset stiff competition at home from domestic rivals including JD.com
Inc, as well as what appears to be growing e-commerce user saturation.
Strong
revenue from mobile transactions helped the company report a 45 percent
increase in quarterly revenue. “The talks are centered around using
Micromax devices as a platform to get into a serious business of its own
in India,” said one of the sources, referring to Alibaba.
Alibaba,
for example, would be able to roll out services such as Alipay, its
online payment platform, on Micromax phones. Ant Financial Services
Group, which owns Alipay, is China’s largest payment service provider
and is controlled by Alibaba’s executive chairman and founder Jack Ma.
The stake sale is aimed at helping Micromax raise capital as it expands into new business segments including personal computing.
The company is seeking funds from private investors, or a possible stock market listing, its co-founder told Reuters.
Micromax
started up in India in 2008, and its affordable, large-screen phones
are now the country’s most popular after Samsung Electronics Co Ltd
smartphones. Micromax counts Sequoia Capital and TA Associates among its
investors.
Posted by : Gizmeon
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