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Rumor: US-based online retailer Newegg may be acquired by a mainland Chinese company

By Wong Chung Wee - on 18 Oct 2016, 10:54am

Rumor: US-based online retailer Newegg may be acquired by a mainland Chinese company

(Image source: Newegg)

According to a report by Taiwanese daily United Daily News, US-based online retailer Newegg may become a subsidiary of a mainland Chinese company. The company in mind is Hangzhao Liaison Interactive Information Technology Co., Ltd. (Liaison Interactive). In September this year, Newegg revealed it received a significant investment from Liaison Interactive, and it appears that this move by the latter is a bid to acquire a controlling stake in Newegg.

United Daily News reported Liaison Interactive’s bid is estimated at 17.7 billion yuan (US$2.63 billion). If successful, it will give Liaison Interactive a 55.7% stake in Newegg. This will effectively make Newegg a subsidiary of Liaison Interactive. According to United News Daily, this strategic move will allow Liaison Interactive to be more “competitive” as it looks to diversify its range of products on offer to its customers. This is because Liaison Interactive is essentially a mobile Internet company based in China.

If the company manages to bring a trusted and popular online retailer like Newegg under its folds, it may potentially allow Liaison Interactive to successfully expand its current software- and services-based portfolio. However, United Daily News also reports that such a risky and expensive acquisition may not necessarily turn out well for the mainland Chinese company. Caveat emptor.

(Source: United Daily News via TechPowerUp, Liaison Interactive, BusinessWire)