China's largest news portal Sina Corporation and real estate service provider E-House China Holdings said on Friday that they had agreed to combine their real estate information businesses and seek a US listing for the new company.
The two firms said that Sina will inject all of its online real estate business into its majority-owned subsidiary China Online Housing and merge it with CRIC Holdings, E-House's real estate information and consulting services subsidiary.
Sina, whose online real estate business revenue was approximately $31 million for the nine months ended December last year, will have 39 percent stake in CRIC, according to the agreement.
E-House has proposed an initial public offering (IPO) of CRIC to the US Securities and Exchange Commission and the proposed IPO will take place "as capital markets conditions permit", the company said.
"By combining Sina's real estate business with CRIC's real estate information and consulting services, we are creating a leading real estate information services platform both online and offline with multiple revenue streams," said Charles Chao, Sina's president and chief executive officer.
Xin Zhou, E-House's chairman and chief executive officer, also said that CRIC's merger with Sina's online real estate business will "create substantial synergies" between the two businesses.
Sina and E-House deal came shortly after Sohu.com, another large Internet portal, spun off its online game business and listed it as Changyou.com Ltd in New York in April. Since then, Changyou's market value has more than doubled.
Experts said Changyou's independent IPO would help Sohu.com to focus on its core business while extracting more value from its online gaming business.
Sina said on Friday that the company did not copy Changyou's model as it has spun off part of its online real estate business in February last year to establish a subsidiary company Sina Leju.
Boosted by the rebound of China's real estate market, E-House's share has doubled this year. Its revenues from real estate consulting and information services for the first quarter of this year were $10.9 million, an increase of 31 percent from $8.3 million for the same quarter in 2008, according to the company report. But its total revenues decreased by 1 percent to $32.8 million in the second quarter.
(China Daily July 25, 2009)
