Chinese 'couple' could be powerful player in online matrimonial market
U.S.-based law firm Levi & Korsinsky announced on Tuesday that it is investigating the proposed merger of two top online matchmaking websites, jiayuan.com and baihe.com, both based in Beijing.
According to an announcement on Monday from Jiayuan.com International Ltd, operator of online dating website jiayuan.com, it entered into an agreement and merger plan with two wholly owned subsidiaries of Baihe Network Co, which runs another leading matchmaking website in China known as baihe.com.
Jiayuan will be sold to Baihe for $5.04 per ordinary share and $7.56 per American Depositary Share (ADS), with each two ADSs representing three ordinary shares, the announcement said.
Wang Yaqian, an analyst at Beijing-based Internet start-up service provider 36kr.com, told the Global Times on Tuesday that the US law firm intends to see whether Jiayuan has done anything illegal during the course of the merger, such as intentionally depressing share prices to help Baihe.
The Beijing Times reported on Tuesday that the deal will be completed before the first quarter of 2016 and Jiayuan would then go private.
Jiayuan began trading on the NASDAQ stock market in May 2011.
Wang noted that Jiayuan might choose to go public in the Chinese mainland after it delists from the NASDAQ.
Jiayuan didn't respond to the Global Times' request for comment as of press time.
"Buying Jiayuan is a very significant move that may help Baihe increase its influence while reducing competition," Yang Xin, an analyst at Beijing-based market research firm Analysys International, told the Global Times on Tuesday.
Recent data from Analysys International showed that Jiayuan has outperformed Baihe both in terms of user activity and market share. According to a report it sent to the Global Times on Tuesday, Jiayuan had about 11 million active users in the second quarter of this year, while Baihe only had about 2.4 million.
The report also showed that Jiayuan had a share of 26.7 percent in the domestic online matchmaking market in the second quarter, while Baihe had 12.2 percent.
A merger may reduce the fierce competition between the companies, which has "consumed a lot of mental energy as well as resources of both companies and hindered the companies' further development," Baihe CEO Tian Fanjiang said in an e-mailed statement Baihe sent to the Global Times on Tuesday.
Tian said that the brands of Baihe and Jiayuan would be preserved after the merger.
By acquiring Jiayuan, Baihe would also have a much larger customer base and more influence in the market, Yang said.
Yang noted that the two companies might pursue different strategies that would complement one another. Jiayuan might concentrate on the online matchmaking sector, while Baihe would seek newer markets, Yang said.
Baihe has sought to diversify beyond online matchmaking. Those efforts included working with Beijing-based electronics retailer GOME Electrical Appliances Holding to launch a home furnishing website called gomehome.com in April. Baihe has also forged deals with personal investment websites such as Beijing-based yindou.com.
Yang said that the proposed merger would be positive for China's online matchmaking market.
"The online matchmaking market has been hit hard by the emergence of mobile-based dating apps. A merger of industry giants like Baihe and Jiayuan could help create a powerful corporation that can really change the industry," she noted.
