Alibaba, the Chinese Internet giant, offered on Monday to buy the 72 percent of AutoNavi Holdings that it did not already own, in an all-cash bid that values AutoNavi, a mapping software company, at about $1.58 billion.
Already a behemoth in e-commerce, Alibaba is seeking to move into the fast-growing mapping industry, one where the company is facing growing pressure from rivals like Baidu and Tencent, as all three try to expand their presence on smartphones.
To blunt its rivals’ moves, Alibaba is seeking to buy full control of AutoNavi, a company listed in the United States that holds a rare mapping license from the Chinese government. That perch has made it an important provider of mapping data, both for its own app and for companies like Google and Apple.
Alibaba first forged ties with the company last May, when it bought a 28 percent stake for $294 million and agreed to begin cooperating on e-commerce products.
In a letter to AutoNavi’s board sent on Monday, Alibaba said it would pay $5.25 per ordinary share or $21 per American depositary receipt, which represents four ordinary shares. The offer represents a 26 percent premium to AutoNavi’s A.D.R. closing price on Friday and a nearly 40 percent premium to its 60-day volume-weighted average price.
“We believe that Alibaba is uniquely positioned to offer superior value to AutoNavi’s shareholders based on our complementary, rather than competitive, business strategies and the potential synergies we can achieve from a full combination,†Joseph C. Tsai, Alibaba’s executive vice chairman, wrote in the letter.
The unsolicited takeover bid is one of Alibaba’s biggest-ever acquisition attempts. And it represents a major initiative ahead of the company’s initial public offering, which is expected to come later this year in one of the biggest market debuts in recent memory.
The Chinese titan has been moving to acquire stakes in businesses that it believes will help broaden its e-commerce empire. It has already purchased an 18 percent stake in Sina Weibo, a Chinese equivalent to Twitter, and a minority stake in ShopRunner, a retail shipping service run by a former chief executive of Yahoo.
Analysts had expected that Alibaba would seek full control of AutoNavi. Under the terms of the investment last May, Alibaba has the right of first refusal to buy the mapping data provider. In Monday’s letter, Mr. Tsai wrote that his company was interested only in a deal and was not willing to sell its stake to another suitor.
It is also betting that the Chinese government will not let a foreign-controlled company buy AutoNavi.
Mr. Tsai, who sits on AutoNavi’s board, wrote in the letter that he expected the company to form an independent committee of directors to consider the Alibaba bid.
Alibaba is being counseled by the law firms Simpson Thacher & Bartlett, Fangda Partners and Maples and Calder.
This post has been revised to reflect the following correction:
Correction: February 10, 2014
An earlier version of this article misstated the value of AutoNavi based on Alibaba's all-cash bid. It is about $1.58 billion, not $1.8 billion.
