After the acquisition of the Hong Kong listed company, Alibaba will return to the Chinese lottery business.
Hong Kong.- Alibaba Group Holding Ltd. acquired Hong Kong-listed AGTech Holdings with the aim to return to the Chinese lottery business.
The holding will invest HK$2.39 billion (US$308 million) in AGTech Holdings Ltd. Ali Fortune Investment Holding Ltd., is buying HK$1.68 billion (US$22 million) of shares and HK$712.6 million (US$92.2 million) of convertible bonds in AGTech. According to a filing made yesterday (Sunday) by the Hong Kong stock exchange, it will own about 59.45 percent of the company upon full conversion. Both companies will subscribe to AGTech’s shares at about HK$0.35 (US$0.05) apiece. Shares in the Hong Kong-listed company closed 7.5 percent lower at HK$1.84 (US$0.24.)
Alibaba suspended its lottery business since February 2015 due to regulation restrictions. China’s lottery business is strictly regulated by the government, which had a participation rate of about 7.5 percent in 2013, compared with 56 percent in Hong Kong for 2012.
On its part, AGTech runs lotteries in multiple provinces in China. After the acquisition, Alibaba and its affiliate will help AGTech with cloud computing and the expansion of its games, hardware, and distribution across the country.