Alibaba Group and Youku Tudou enter merger agreement

Upon completion of the transaction, the shareholders of Youku Tudou, other than the current investment entity controlled by Alibaba, will have the right to receive USD 27.60 per American Depositary Share (“ADS”, each representing 18 ordinary shares of Youku Tudou) in cash. The price represents a premium of 35.1% over the closing price of Youku Tudou’s ADSs on October 15, 2015, one day prior to the date that Youku Tudou announced it had received a “going private” proposal from Alibaba, and a premium of 49.9% to the volume-weighted average closing price of Youku Tudou’s ADSs during the three months prior to October 15, 2015.

Youku Tudou’s board of directors (the “Youku Tudou Board”), acting on the recommendation of an independent special committee of the Youku Tudou Board (the “Special Committee”), unanimously approved the merger agreement and the Transaction and recommends that Youku Tudou’s shareholders vote to authorize and approve the merger agreement and the transaction.

The transaction, which is expected to close in Q1 2016, is subject to customary closing conditions, including the affirmative vote of the shares of Youku Tudou representing at least two-thirds of the shares present and voting in person or by proxy as a single class at an extraordinary general meeting of Youku Tudou’s shareholders. Alibaba has entered into a support agreement with Youku Tudou’s Founder, Chairman and Chief Executive Officer Victor Koo, Chengwei Capital and various entities affiliated with them pursuant to which such shareholders have agreed to.

It is solely in their capacity as shareholders of Youku Tudou, to vote all of the ordinary shares of Youku Tudou beneficially owned by them in favor of the transaction and against any competing transaction in accordance with the terms of the support agreement. Alibaba and the parties to the support agreement collectively beneficially own approximately 60.6% of the total voting power of the Youku Tudou shares.

Following the completion of the Transaction, Victor Koo will remain as Chairman and Chief Executive Officer of Youku Tudou. If the transaction is completed, Youku Tudou’s ADSs will no longer be listed on the New York Stock Exchange. Morgan Stanley Asia Limited is acting as financial advisor to Alibaba. Simpson Thacher & Bartlett LLP is serving as US legal advisor to Alibaba, and Fangda Partners and Walkers are serving as PRC legal advisor and Cayman Islands legal advisor, respectively, to Alibaba.

J.P. Morgan Securities (Asia Pacific) Limited (“J.P. Morgan”) is acting as financial advisor to the Special Committee. Skadden, Arps, Slate, Meagher & Flom LLP is serving as US legal counsel to the Special Committee, and TransAsia and Conyers Dill & Pearman are serving as PRC legal advisor and Cayman Islands legal advisor, respectively, to the Special Committee. Kirkland & Ellis is serving as legal advisor to J.P. Morgan.