Alibaba Group Holding Ltd., China’s largest e-commerce company, has offered $1.58 billion for full control of digital mapping firm AutoNavi Holdings Ltd. AutoNavi holds a 31 percent share of China’s mobile map app market along with a rare mapping license from the Chinese government. Alibaba purchased a 28 percent stake in the company for $294 million in May 2013, and it is now seeking control of the remaining 72 percent of shares.
Alibaba’s offer to AutoNavi comes as the company is trying to expand its product lineup to compete against Tencent Holdings Ltd. and Baidu Inc. while also planning for an initial public offering that may take place in the United States, Hong Kong or London. If AutoNavi accepts the offer, the deal would be one of Alibaba’s largest acquisitions to date.
Purchasing AutoNavi will allow Alibaba to compete with other digital navigation businesses in China. Compared to AutoNavi’s 31 percent market share for map apps in China, Baidu Maps has 27 percent of market share, followed by Sougou Maps at 8.5 percent and Google at 7.6 percent.