Alibaba Group is expected to reap more than $2 billion from the sale of its game developer unit Lingxi Games to private equity firm Trustar Capital.
Trustar said it had reached a transaction agreement with Alibaba to acquire the tech giant’s entire stake in Lingxi.
Alibaba and Trustar reached a formal agreement after several rounds of talks, according to an internal memo sent to Lingxi staff yesterday by the game developer’s CEO Zhou Bingshu and reviewed by Reuters.
Under the agreement, Alibaba will transfer all of its Lingxi stake to Trustar, the memo said.
The memo did not disclose the value of the deal or when the transaction was expected to close. It also gave no details of regulatory approvals or other conditions attached to the deal. Neither did Trustar’s statement.
Zhou said in the memo that he and Lingxi’s management team would continue to lead the company, signalling continuity in the studio’s operations following the ownership change.
Bloomberg News, which first reported the memo, said the deal would be worth at least $1.5bn, citing sources.
Alibaba, one of China’s largest technology companies, operates e-commerce platforms, cloud-computing services and other digital businesses. It has been reviewing and disposing of non-core assets as it directs capital and management attention toward strategic priorities including AI and cloud.
Alibaba’s decision to divest from Lingxi follows its recent sales of hypermarket operator Sun Art and department-store chain Intime.
The Chinese tech company had been seeking a buyer for Lingxi for some time, according to two separate sources familiar with the matter, who spoke on condition of anonymity because the information is confidential.
Trustar, formerly known as CITIC Capital, is an Asia-focused private equity firm that has the industry resources and operational expertise to support Lingxi’s next stage of development. It said it would support Lingxi’s existing management team.
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