AutoNavi agrees to be acquired by Alibaba

Chinese digital mapping and navigation company AutoNavi Holdings Ltd. has agreed to be acquired by e-commerce company Alibaba Group Holding Ltd. in a deal valued at $1.5 billion.

Alibaba will pay $5.25 per share to AutoNavi stockholders, or $21 per American depositary share. That is a 27 percent premium over the company's closing price on Feb. 7, the last day of trading before its talks with Alibaba became public.

Alibaba already owns approximately 28 percent of AutoNavi's outstanding stock.

The deal, which was announced Friday, is expected to close in the third quarter of 2014.

AutoNavi says the deal maximizes value for its shareholders and will make it a stronger competitor in its niche.

Shares of AutoNavi traded on the Nasdaq rose 2.5 percent to $20.55 amid a market dip.

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