Alibaba set to merge food delivery units as it looks to ramp up China competition with Meituan-Dianping
Merging both units will help Alibaba better position itself in its battle for market share with Meituan-Dianping in China
Alibaba Group Holding will merge its food delivery units and raise funds for the combined group, as it looks to ramp up its fight against rival Meituan-Dianping for the lion’s share of China's multibillion-dollar on-demand services industry, according to a report by Reuters.
Alibaba's food delivery platform Ele.me, which it acquired for US$9.5 billion in April, will merge with its food and lifestyle services arm Koubei, Reuters reported on Tuesday, citing anonymous sources. Hangzhou-based Alibaba is looking to raise between US$3 billion and US$5 billion for the combined entity, which could be valued at as much as US$25 billion.
Japanese conglomerate SoftBank Group Corp’s US$92 billion Vision Fund will lead the investment in the merged Ele.me and Koubei operation, according to a Bloomberg report that also cited sources.
An Alibaba spokeswoman declined to comment on market speculation.