As Facebook Inc. (FB) spends $19 billion on WhatsApp Inc., half a world away China’s Internet giants are in the middle of their own acquisition rush.
Tencent Holdings Ltd. (700), Asia’s largest Internet company, Alibaba Group Holding Ltd. and Baidu Inc. (BIDU) are seeking targets to plug gaps across their businesses as they vie for China’s 618 million Web users. Citigroup Inc. sees the trio driving Internet-related deals in China to a record this year, adding to their 44 announced acquisitions since 2012 valued at $18.7 billion, according to data compiled by Bloomberg.
For each of the big three Chinese Internet companies, there is at least one technology provider that would fill a need. Qihoo 360 Technology Co. (QIHU), (LONG) with a market value of $13.2 billion, might appeal to Chinese e-commerce leader Alibaba because of its anti-virus software, said Guotai Junan International Holdings Ltd. Travel site Ctrip.com International Ltd. may lure Tencent, according to Riedel Research Group Inc., while classifieds website operator 58.com Inc. could attract China’s largest search engine Baidu, Pacific Crest Securities said.
“It’s going to be a pretty hot M&A space for the next couple of years and that’s really just driven by competition between the three largest players,” Cheng Cheng, a Portland, Oregon-based analyst at Pacific Crest, said in a phone interview.
Internet-related companies worldwide have already announced $27.5 billion of deals this year, led by the Facebook-WhatsApp acquisition, according to data compiled by Bloomberg.
Read more at Bloomberg.