Private equity firm Trustar Capital is nearing an agreement to acquire Lingxi Games, Alibaba Group’s video game business, in a transaction that could value the unit at about $1.3 billion, according to Bloomberg. The deal would mark a significant divestment by Alibaba as the Chinese technology giant continues to reshape its portfolio and concentrate resources on higher priority businesses.
Lingxi Games operates within Alibaba’s digital entertainment portfolio and has developed and published games for the Chinese and international markets. The proposed transaction would transfer ownership of the gaming business to Trustar, giving the private equity firm exposure to China’s large and increasingly globalised gaming industry. The reported price is below the $1.5 billion figure initially associated with the potential transaction, with negotiations still subject to final terms.
For Alibaba, the potential sale fits a broader strategy of reallocating capital and management attention as the group increases investment in artificial intelligence and cloud computing while reassessing noncore assets. For Trustar, acquiring Lingxi would provide an opportunity to create value from a sizeable gaming portfolio at a time when China’s gaming market remains commercially significant and Chinese developers are expanding overseas.
The transaction is not yet final, meaning its valuation and completion terms could still change. If completed, the sale would underline the growing role of private equity in China’s technology asset market while giving Alibaba additional capital and strategic flexibility as it focuses increasingly on AI, cloud infrastructure and its core digital commerce operations.
