Alibaba to sell Lingxi Games in more than $2 billion deal, source says

Alibaba Group is set to sell its game developer unit, Lingxi Games, for more than $2 billion to private equity firm Trustar Capital, according to a source familiar with the matter. This agreement was reached after multiple rounds of negotiations and was confirmed in an internal memo sent to Lingxi staff by Lingxi's CEO, Zhou Bingshu.

The deal does not disclose the closing date, regulatory approvals, or other conditions. Lingxi Games, known for the multiplayer strategy game based on China's Three Kingdoms era, will transfer its stake to Trustar under the agreement. Alibaba, a major Chinese technology company, has been reviewing non-core assets as it focuses on strategic priorities like AI and cloud.

Trustar, an Asia-focused private equity firm, is well-equipped to support Lingxi’s future development. The transaction follows a period of uncertainty for Lingxi, including delayed fundraising plans due to new regulations in China's online gaming sector and a management reshuffle in 2024.