Alibaba Will Sell Lingxi Games for More Than $2 Billion

According to a source familiar with the situation who spoke to Reuters, Alibaba Group (9988.HK) is anticipated to make over $2 billion from the sale of its game development division Lingxi Games to private equity company Trustar Capital.

After multiple rounds of negotiations, Alibaba and Trustar have officially signed a deal, according to an internal message delivered to Lingxi employes on Monday by Zhou Bingshu, CEO of the game developer, which Reuters read.

Reuters’ requests for comment were not immediately answered by Lingxi, Alibaba, or Trustar.

According to the document, Alibaba will give Trustar all of its Lingxi ownership.

The deal’s value and the anticipated closing date were not disclosed in the memo. Additionally, it provided no information about regulatory approvals or other terms related to the transaction.

Zhou stated in the memo that he and Lingxi’s management group will remain in charge of the business, indicating that the studio’s operations would continue after the ownership transition.

According to sources cited by Bloomberg News, which first published the document, the deal would be valued at least $1.5 billion.

One of the biggest tech firms in China, Alibaba runs cloud computing services, e-commerce platforms, and other online enterprises. It has been evaluating non-core assets while focusing management and capital on strategic goals including cloud and artificial intelligence.

According to two different people with knowledge of the situation who spoke on condition of anonymity due to the private nature of the information, the Chinese tech business had been looking for a buyer for Lingxi for some time.

According to Zhou, Trustar, formerly known as CITIC Capital, is an Asia-focused private equity firm with the operational know-how and industry resources to support Lingxi’s next phase of expansion.

After the transaction, it was unclear if Alibaba will continue to have any business relationships with Lingxi, such as publishing, cloud services, or technology collaborations.