K&E & Skadden Among Five Firms on 58.com’s Stake Acquisition in Ganji
David Zhang –
Adviser to Ganji.com
Julie Gao –
Adviser to 58.com
58.com Inc. today announced that it has acquired a strategic stake in Falcon View Technology Limited, the holding company of the PRC entities operating Ganji.com, a major online local services marketplace platform in China. Concurrently, 58.com also announced an approximately US$400 millionadditional investment by Tencent Holdings Limited, a leading provider of internet services in China.
Under the terms of the definitive agreement with shareholders of Ganji (“the 58.com-Ganji Strategic Transaction”), and as part of an intended long-term, strategic combination transaction, 58.com has agreed to acquire an approximately 43.2% fully diluted equity stake in Ganji for a combination of share consideration and cash, including approximately 34 million newly issued ordinary shares of the Company (one American Depositary Share, or “ADS”, represents two class A ordinary shares) and US$412.2 million in cash. The two companies, which will continue to operate their respective brands, websites and teams, intend to maximize business synergies created by this new strategic relationship, and capitalize on opportunities to cooperate and further expand their businesses.
Founded in Beijing in 2005, Ganji.com has become one of China’s leading online local services marketplaces. Every month, hundreds of millions of users come to Ganji.com to access a wide range of location-based services from millions of active merchants, in areas such as jobs, housing, second hand products and local services information.
Concurrent with the 58.com-Ganji Strategic Transaction and incremental to its existing share ownership in 58.com, Tencent has signed a definitive share purchase agreement with 58.com to purchase an additional approximately US$400 million of newly issued ordinary shares from 58.com at a purchase price equivalent to US$52 per ADS (the “Tencent Investment”). Following the completion of this additional investment by Tencent, Tencent will hold in aggregate approximately 25.1% of the total issued and outstanding shares of 58.com on a fully-diluted basis.
Both the 58.com-Ganji Strategic Transaction and the Tencent Investment are expected to close within a few days, subject to customary closing conditions.
Mr. Michael Jinbo Yao, Chairman and CEO of 58.com, commented, “We are pleased to make this large-scale strategic investment in Ganji.com to jointly realize major cost, revenue, and strategic business synergies. This transaction is part of our larger plan to execute our vision of integrating our respective businesses and creating a larger and more effective local services internet platform to help consumers around China find the services that they need in their local area. Ganji.com has done a tremendous job building a talented team, and we look forward to working more closely with them as we continue to expand in this growing and underserved market.”
Mr. Mark Haoyong Yang, Chairman and CEO of Ganji.com, added, “After extensive discussions, we are pleased to reach this strategic agreement with 58.com. Both Ganji and 58.com are leading players in the online classified market and have developed unique capabilities in O2O. Personally and on behalf of Ganji, I look forward to taking advantage of the great chemistry between Ganji and 58.com, and leveraging our respective resources and advantages. We have seen and continue to see the mobile internet enabling a transformative opportunity in the classified industry and across O2O categories. Ganji has been built on the DNA of mobile connectivity. Together with 58.com, we will continue to build a leading platform offering our customers the best experience and localized service.”