Discount coupons provider Meituan.com and Dianping Holdings, owner of a restaurant-review app, are in talks to create a $15 billion company that will rival Nuomi, Baidu's group-buying platform, the Wall Street Journal reported Tuesday.
The deal -- involving China's richest man, Alibaba Group Holding Ltd. founder Jack Ma, and two more of the country's tycoons -- could alter the competition to book restaurant tables, sell cinema tickets and provide other so-called online-offline services, and stiffen competition for Chinese Internet giant Baidu Inc.
The deal between the Internet startups, backed by Alibaba and Tencent Holdings Ltd., would also be the biggest in China's Internet industry this year, and would be at least the second time that companies backed by Alibaba and Tencent have joined forces, the Journal reported.
All the companies involved in the deal are in the online-to-offline industry, meaning the customers are online but the businesses making the sales, such as restaurants and cinemas, are not.
It's not the first time Alibaba and Tencent have worked together. In February, their taxi-hailing ventures combined to form Didi Kuaidi, which then raised $3 billion, a feat the Journal said a combined Meituan and Dianping would want to replicate. In August, the Journal reported Alibaba and Tencent may both invest in an Internet TV start-up.
An improved ability to raise funds will come in handy for a combined Meituan and Dianping to compete with Nuomi, which is set to receive $3.2 billion from Baidu over the next three years, according to the Journal. The deal will also help a combined company cut back on marketing expenses, much of which have been aimed at each other, the Journal said.