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Equity War: a story of Alibaba

via:博客园     time:2015/12/19 20:30:51     readed:2080


In this paper, the author: He Wenyu, a lawyer and accountant license, engaged in mergers and acquisitions investment work, try to use the most basic business logic to analyze the company's strategy and mergers and acquisitions.

This paper is the author of the last week to share with friends of the stock of the war of the text, mainly based on public media information, coupled with personal speculation to deduce.

This share is divided into three parts, the first part is why to talk about this topic, the second part is a brief talk about the technology of Alibaba story, the third part is to point out the core issues in the story of alibaba.

One, from the merger and acquisition investment to the equity war

If the site is concerned, mergers and acquisitions in the majority of the legal industry is a capital market business, and the majority of the equity war is the dispute settlement business.

For most of the little friends and partners, any company is the subject of a project. In my experience, investment management and investment manager is basically not told lawyers and accountants, real investment motivation, can only speak highfalutin. (I'm just like this and the project lawyer and accountant).

Therefore, for intermediaries, why invest in this project, the development of the project after delivery, they do not understand, it is impossible to understand. That is to say, the development of the company's development process is a series of fragments from the perspective of the intermediary structure.(if you want to move from the investment manager, solicitor or accountant, this lack of perspective is quite regrettable.)

This share will try to use Alibaba as an example, tell a complete story, let everyone know what the antecedents and consequences (Note: just I think the antecedents and consequences). Such a complete perspective for everyone to do due diligence, transaction framework design is essential.

Two, equity War: a story of Alibaba

Alibaba's story, first is the story of the eighteen arhats. In 1999, the seventeen men and Ma began to struggle together until today, 2015. One of the most crucial is that Cai Chongxin found Ma Yun (Note: not Ma Yun found Cai Chongxin). As Cai Chongxin is who, you can own Google.


Cai Chongxin did two things at the beginning:

  1. The equity agreement eighteen Arhats bundled together (in fact is the importance of a certain degree of partnership agreement, after everyone will know this behavior);
  2. To Goldman Sachs, AB Investor, Singapore government technology development fund and other C V investment in Alibaba $5 million.

For the 1999 of Chinese entrepreneurs, if the non returnees, Ma Yun's English speaking ability is indeed a lot of advantages for the case of Alibaba in overseas financing. However, English well, and will not directly lead to Sun Zhengyi's investment.


Personal opinion,Reasonable credit endorsement chain is: Cai Chongxin

Rumors of the end of 2002, Ma and Sun Zhengyi secretly, completely changed the ecological e-commerce strategy and the China alibaba. At that time, Sun Zhengyi asked Ma Yun

However, if we think about it, the C2C system to do B2B what is the difficulty?! And at that time eBay and Alibaba's brand, technology and resources of the gap, if eBay into the field of B2B in China, and then there is no then.


2003, Ma team's strategic decision is that only the first attack C2C, to ensure that the eBay does not attack B2B. In other words, Ma team actually want to in C2C (now the taobao.com, free C2C service) to take the money price war, not for profit taobao.com in the future, but in order to maximize the impact of eBay C2C (eBay China eBay, charging C2C service).

The problem is that Alibaba has no money to hatch C2C business, so you need to communicate with investors thisScorched earth policy (in taobao.com burn is to ensure that Alibaba net profit is not affected, so that Alibaba more than the critical point, taobao.com will retire after winning merit).As a result, $22 million is mainly for the Alibaba network, while the $60 million is for the suicide attack on taobao.

When Taobao to commit three years free of charge on the way, eBay China is to 10 times the investment Taobao Taobao to fight against Taobao, the natural no residual time, energy and resources to develop China's B2B business. However, when the eBay Chinese managers authority is too low, major decisions are to determine the headquarters of the United States, even 10 times the resources are slowly falling downwind.

If you say that the suicide attack is the first pass of the Ma Yun team, then, eBay's malicious acquisition is the second pass through the Ma Yun team.

The acquisition of competitors in the same industry, as long as you believe in humanity, was acquired by the company and the brand must be cut into pieces to dismember what is absolutely impossible.


  1. 2005 has been the first two round of sixth investors in fifth years, it is necessary to request the withdrawal of the year;
  2. Taobao and eBay eBay do not see the outcome, while Tencent pat Network to join C2C, so that Alibaba had to continue to invest in C2C business.

EBay wants to use 1 billion dollars to buy Alibaba, completely end the China C2C burn wars.The Ma Yun team at that time simply can not have the money to buy back shares, only to seek non eBay industry capital to balance these financial capital.


To meet the requirements of Ma team and Softbank, YAHOO finally points to the investor. YAHOO Japan is the Japanese YAHOO business sold to Softbank and YAHOO Zhongguo Softbank is responsible for the operation, the operation also like before YAHOO Japan each condition as follows, can not copy the roadmap before?

The Ma team persuaded YAHOO and Softbank management and the board of directors, the complex and sophisticated trading China Internet history most (no one)


The first step, YAHOO acquired Softbank holds all taobao.com stake to Softbank can achieve the exit, forming a profitable investment on taobao;

The second step, Softbank and YAHOO, bought held by other investors in the first three part of Alibaba stake, on the one hand, to achieve the other investors to cash out, on the other hand, Softbank did not spend a penny (half in cash cash taobao.com) has increased its stake in alibaba;

Third step, YAHOO

This transaction framework, the perfect realization of the different demands of different investors:

  • Before three rounds of investors to cash out;
  • Softbank realized some cash withdrawal, and without the use of cash will increase in holdings of alibaba;
  • YAHOO successfully stripped YAHOO China, converted into a stake in alibaba;
  • Ali Baba was in the US dollar;
  • Ma Yun team kept control. (every time I see the trading framework, I can only wonder.)

In order to maintain control, the transaction framework is also designed specifically:


Before October 2010, Ma team is controlled 36 of the voting rights, YAHOO and Softbank are respectively 35 and 29, but most of the power is granted to the board of directors of alibaba. However, the same before October 2010, Alibaba has 2 directors, YAHOO and Softbank 1 each, this board is essentially paralyzed, not through any resolution is not conducive to the Ma team. That is, the real power is in the management, and Ma Yun's CEO position can not be released until October 2010. In other words, the control of the team's team in October 2010 will not be a fundamental challenge. (this has a significant impact. For Alipay war)

That is to say, YAHOO and Softbank to the Ma Yun team is not restricted five years.


In this five years, taobao.com not only completed a scorched earth policy, successfully let Alibaba become B2B's hegemon and the successful listing, but also surprisingly beat the eBay, to snatch the dominance of C2C (the Ma Yun team and investors when investing in taobao.com does not anticipate this). More importantly, the Ma Yun team developed Alipay this big kill.

On the contrary, the big shareholder YAHOO instead of good. In 2008 was almost the acquisition of Microsoft, in fact, Ma team estimates will be scared of. We may wish to think about the company's acquisition of the company's end is how to estimate the Ma team that is the case, so the. But also reminded the Ma Yun team



On the Alipay.com war, according to the two sides after the official announcement, Alipay VIE structure is YAHOO and Softbank and Ma Yun agreed to build the team, so there is no Ma Yun team

The core of the problem is that in order to obtain the central bank's payment license, the Ma Yun team did unilaterally terminate the agreement to ensure that the full compliance with China's laws and regulations. However, once the termination of the agreement, Alipay had no relationship with Alibaba, in this respect, the Ma Yun team did

If you remember

However, the compensation negotiations are also in secret.


Finally, a Alipay compensation agreement and YAHOO repurchase equity agreement.At present, there is no evidence that the Ma Yun team is by agreement to control termination Alipay forced YAHOO and Softbank began to negotiate and get in favor of the Ma Yun team is to reach agreement, but in fact this result.From then on, the control of the Ma Yun team can no longer be challenged.

Three, may be overlooked several worth thinking

  • Eighteen Arhats ready to go

This is one of the most fantastic the problem. Compared to other China Internet Corporation, the founder of the team is the most extensive, but it is the most stable, the eighteen Arhats has not any faction, has maintained a consistent action in Alibaba storm.

I can only speculate with Cai ChongxinBut we have forgotten the relationship between the founder of the team, how to allocate the rights and responsibilities of the agreement to the stability of the founder of the team and more than ten years to maintain consistent action is what we should think about.

Any equity war, the founder of the team split or the founder of the lack of team, it is bound to lose control. People are not always good, so we believe that the power of the system, but only a good system to have good strength.

  • Demands of different investors and the aspirations of the founders have never been different

The reason why eBay can force the emperor to abdicate, to some extent is spotted three cycles ago investors must withdraw investment in five or six years period, that is to say the risk investors are required to obtain profits in a certain period, sometimes even at the expense of the cost of the invested enterprise.

For eBay, YAHOO, Google or Microsoft industrial capital, the profit cycle is very important, but will the value of industrial integration, whether shares or the purpose of the acquisition is to eliminate competitors (such as eBay tried to buy Alibaba) or to obtain the specific resources (such as Google's takeover of Motorola), eventually investment company is also difficult to take off dismembered fate.

If the shareholders and the board level, effectively balance the power of financial capital and industrial capital, the company is the core issue of Guan Zhizhong.

  • What Alipay.com won the war?

If you are a manager investment legal background, more than 90 is not to launch Alipay.com War (financial background is more than 70).Our awareness of compliance is telling us to have the spirit of the contract, but if the cost of default is far lower than the cost of compliance?For example, should we recommend that the management of unilateral termination of the agreement be controlled in order to force the two major shareholders to sit down and negotiate? If we can't get out of this box, and how there is such a creative solution?

More importantly, why YAHOO and Softbank and Ma team to fight a life-and-death struggle? The first is to ensure that Alipay.com can obtain payment license, followed by,If you remove the Ma Yun team, and whether it can be a management layer can override the Alibaba Empire it? Especially the eighteen Arhats consistent action, YAHOO and Softbank did not have any agent in the management of the case.

Alibaba is an interesting case of the equity of the war, both sides are extremely rational in the existing framework of the situation to maximize their own interests, fighting and not broken.

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