Alibaba to sell Lingxi Games in over $2 bn deal

Alibaba Group 9988.HK is set to earn over $2 billion from the sale of its game developer unit, Lingxi Games, to private equity firm Trustar Capital, according to a source familiar with the matter. Trustar confirmed on Monday that it had reached a transaction agreement with Alibaba to acquire the entire stake in Lingxi. The formal agreement followed several rounds of negotiations, as disclosed in an internal memo to Lingxi staff.

Following the ownership change, Zhou Bingshu, Lingxi and Alibaba's CEO, stated that the company's management would continue to lead the studio, ensuring continuity in operations. Alibaba, a major Chinese technology company, generates revenue through e-commerce, cloud computing, and other digital services. It is currently focusing on strategic sectors such as AI and cloud.

The divestment of Lingxi follows similar sales of other non-core assets, including hypermarket operator Sun Art and department-store chain Intime. Trustar, previously known as CITIC Capital, is an Asia-focused private equity firm with the necessary resources and expertise to support Lingxi's future growth. The deal will see Alibaba transfer its Lingxi stake to Trustar, though it remains unclear if Alibaba will retain any commercial ties with the studio after the sale.

Lingxi Games, based in Guangzhou, is renowned for its multiplayer strategy game "Three Kingdoms: Strategy Edition," developed in collaboration with Japan's Koei Tecmo Holdings.