China’s e-commerce giant Alibaba has reached an agreement to sell its minority stake in recently merged online group Meituan-Dianping, according to reports. Meituan-Dianping includes Maoyan, one of China’s leading cinema ticketing companies.
News of the $900 million deal was announced Thursday by The Wall Street Journal, but not confirmed by either company. Alibaba will announce its full year financial figures in a matter of hours, before the start of trading on the New York Stock Exchange.
The deal had been widely expected since October year when privately-held Meituan, which counted Alibaba as a backer, and Dianping, backed by Tencent, agreed on a merger. The combined group has often been likened to a mix up of Groupon and Yelp. The merger and $3.3 billion fund-raising at the time put Tencent in the ascendant, at a time when Alibaba seemingly wanted to build its own businesses, rather than own minority stake.
The share sale was complicated by Alibaba’s shares in Meituan-Dianping having a lower ratchet or buyback price, making them less valuable than other shares in the group. Online ticketing is a growth area for Chinese cinema, with some recent estimates suggesting that more than 60% of movie tickets are sold that way. Meituan-Dianping this week revealed transaction volume of $25.8 billion last year.
The gross Chinese box office in 2015 was worth $6.7 billion.