Alibaba set to buy AutoNavi for $1.5b

E-commerce giant Alibaba Group will acquire Chinese digital mapping company AutoNavi Holdings Ltd in a deal which values AutoNavi at about $1.5 billion, AutoNavi announced on its Weibo account over the weekend.

When the deal is completed, AutoNavi's shareholders will receive $5.25 per ordinary share, or $21 per American Depositary Share (ADS), the statement said.

The offer indicates a premium of 27 percent to AutoNavi's ADS closing price on NASDAQ on February 7, the last trading day before AutoNavi announced that it had received Alibaba's acquisition proposal on February 10.

The deal is expected to close in the third quarter of this year.

Cheng Congwu, president and CEO of AutoNavi, said in the statement that the company believes the deal will maximize shareholders' benefits and being a part of Alibaba is AutoNavi's best choice. He also said the support from Alibaba will speed up AutoNavi's development in mobile Internet.

Lu Zhaoxi, CEO of Alibaba, said the cooperation will help AutoNavi maintain the leading position in mapping, the statement said.