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Alibaba buys NetEase's e-commerce site Kaola for $2B

Alibaba Group Holding Ltd. is buying Chinese tech giant NetEase Inc.'s import online shopping platform Kaola for approximately $2 billion, the companies said Sept. 6.

Following the transaction, Kaola will continue to run as an independent brand. Alibaba has named Tmall Import and Export General Manager Alvin Liu as the new CEO of the business.

"With Kaola, we will further elevate import service and experience for Chinese consumers through synergies across the Alibaba ecosystem," Alibaba CEO Daniel Zhang said in a statement.

The announcement confirms a report by the Financial Times in August. It was also reported in February that Kaola was in talks with Amazon.com Inc.'s Chinese joint venture to merge, but the FT said Alibaba's U.S. rival did not place a bid for Kaola.

In the official release, Alibaba said it will "further elevate import service and experience for Chinese consumers through synergies across the Alibaba ecosystem."

Meanwhile, the Chinese e-commerce giant has also agreed to invest $700 million in NetEase Cloud Music alongside Yunfeng Financial Group Ltd. NetEase will continue to be the controlling shareholder of the music streaming app following the deal, which is subject to certain closing conditions.

Zhang said Alibaba is looking forward to being part of the future development of NetEase Cloud Music and exploring collaboration in the digital entertainment space.