Qihoo 360, Kulun Enter $1.2B Buyout Bid For Opera

Norwegian-based Opera Software ASA, maker of the world’s fourth-biggest mobile browser, has received a $1.2 billion USD buy-out offer from a Chinese consortium including search and antivirus giant Qihoo 360 Technology Co. and game company Beijing Kulun Tech Co., according to a statement by Opera on Wednesday.

The consortium is offering to acquire the entirety of Opera shares at 71 Norwegian Kroner each ($8.33 USD), a 46% premium on their last trading price. Opera suspended trading on Friday amid speculation of the takeover and resumed on Wednesday, closing up 33% at  the end of the day.

Opera still trails behind Alphabet’s Chrome, Alibaba-backed UC Web and Apple’s Safari in the global mobile browser market, with a share of roughly 10 percent. Opera’s management has been open since last year about the potential of the company’s sale.

In the face of stiff competition Opera has focussed on data compression to target their mobile browser to emerging markets where bandwidth is limited. The company’s interest in China, the world’s biggest mobile market, extends this existing strategy. China has a large untapped mobile market as well as an extensive pool of low-budget smartphone consumers. 

“Facebook and Google have their ecosystems and now we have one too, in a part of the world that is growing incredibly fast and where we will become very strong,” Opera Chairman Sverre Munck told Reuters in an interview on Wednesday.

The acquisition has various benefits for both Qihoo 360 and Kulun. Qihoo has been seeking to extend their mobile search business, which is currently ranked second behind Baidu. Qihoo’s mobile search business has lagged in recent quarters, paralleling a general leveling in mobile search among their competitors. The acquisition of Opera could boost their position as well as supplementing their existing user base to cross-sell Qihoo-backed products, including their antivirus software, to Opera users.

Kulun, which has previously specialized in game development, recently extended further into the mobile market by purchasing 60 percent of US-based gay dating app, Grindr, for approximately $93 million USD.

The Chinese consortium behind Opera’s purchase also includes Golden Brick Silk Road (Shenzhen) Equity Investment Fund and their Yonglian Investment affiliate.