AUSTRALIA’S largest tech company, Tencent, has announced a major restructuring in a bid to revive its fortunes.
It is set to merge with Chinese firm Alibaba and will merge with a US company called Tencent Wanda.
The move has been described as a sign of the rise of the Chinese internet giant, and has sparked a backlash from some Australian commentators.
“The fact is, this is a merger that will be the largest acquisition in history, and it will have a profound impact on the future of the internet and Australia,” said Senator Brandis.
“And that’s the kind of deal we have to get to get a better, more equitable and more sustainable future for our economy.”
He said the deal would “create hundreds of thousands of jobs, create tens of millions of dollars in economic activity, create thousands of new jobs, and a new era of internet freedom”.
In a statement, Ten cent chief executive officer Liliya Shneiderman said the company’s board had voted to approve the deal on Tuesday, adding that the merger would “lead to the formation of a new company that will benefit the Australian public, and will be a major asset to our Australian partners”.
She said Tencent would invest “significant resources” in its Australian operations and create 100,000 new jobs.
“Our aim is to build the most secure and innovative internet company in the world, and we are confident we can deliver this,” she said.
Senator Brandes office has said he will not oppose the deal.
“Tencent has an extraordinary record of success and will lead our economy and our future,” he said.
The deal is subject to approval by the Australian Securities and Investments Commission.
Senator Mark Butler, the Opposition’s immigration spokesman, said it was a “very bad idea”.
“The only reason we’ve got this deal is because of Tencent and Alibaba, so there is absolutely no other reason why we shouldn’t have a deal,” he told 7.30.
“This deal will create hundreds of thousand jobs, creating tens of thousands more jobs, a whole lot of good for Australian workers.”
The deal has been criticised by some Australians as being a corporate takeover of an independent company.
“It’s a massive merger, and if you look at the facts of the matter, it’s a giant corporate takeover that will have far-reaching economic consequences for Australians and for our national economy,” Senator Butler said.
Alibaba chief executive Liu Yonghong said the announcement would “change the face of the world”. “
You see, the truth is that the Chinese are not going to buy Tencent.”
Alibaba chief executive Liu Yonghong said the announcement would “change the face of the world”.
“Today’s announcement of this merger will have profound consequences for the global internet ecosystem, and the wider global economy,” he wrote on Facebook.
“We are excited about the potential of this historic merger and we look forward to continuing to collaborate with our Australian partner Tencent as we grow and evolve our business.”
He also said the merger was “in line with our business model”.
Tencent is the largest Chinese internet company with a market value of $US3.5 billion ($4.2 billion).
The deal will also create an affiliate of Alibaba called Tenlink.
The Chinese giant already owns a stake in Tencent’s US parent company.
Senator Butler says the move would create hundreds more jobs.
He says it will also lead to the creation of a “new era of Internet freedom”.
“We want to ensure that Australian entrepreneurs will have access to a network of trusted and trustworthy partners who will help them grow and innovate in a way that helps them succeed in the future,” Senator Brandi said.
Labor senator David Leyonhjelm said it would be a mistake for the Labor party to support the deal, and said the Labor leader was “not interested” in the deal with Tencent.
“Senator Brandis has already said that he wants to get rid of Ten cent and he doesn’t seem to want to see the Australian economy succeed in that direction,” he added.
“That’s what you get when you go to China and they have a merger and you can’t stop them.
You can’t block them.”
Labor also said it supported the move because it would “save jobs and support Australian workers”.
The Government’s immigration spokesperson, Richard Marles, has previously said the proposed deal was the “biggest merger in history”.
He said it showed “the true extent of the China strategy”.
He also defended the Labor government’s decision to reject the deal in the first place.
“One of the major issues in this matter is the fact that Labor has consistently opposed the Chinese merger,” Mr Marles said.
He said Labor opposed the merger because it was “a big merger for the Chinese”.
“It is also the biggest acquisition in the history of the Australian tech industry,” he noted.
Senator Marles told 7,30 the Labor Government was in the process of negotiating a