Opera Software plans partial sale to Chinese group

STOCKHOLM • Norway's Opera Software is selling parts of its business to a Chinese consortium for US$600 million (S$809 million) after a full takeover did not get regulatory approval in time.

The proposed partial sale is little consolation to investors, who are still in the dark about why the deal did not proceed.

According to a statement yesterday, Opera will keep businesses such as applications and games but sell browsers for mobile devices and desktops, technology licensing and a stake in a Chinese venture.

The partial sale means the buyer group gets the assets that Opera is best known for - browsers that help mobile phone, tablet and computer users surf the Web faster by using less data.

The software maker has 350 million monthly active users of its consumer products. Its browsers are embedded in the devices of smartphone makers such as Samsung Electronics and Xiaomi.

The buyer group includes private equity firm Golden Brick Capital Management and Chinese game maker Beijing Kunlun Tech, Internet security provider Qihoo 360 Technology and Yonglian Investment. Its original offer valued Opera at more than US$1 billion.

Opera said last week that the full takeover still lacked government approval, without disclosing more details.

The deal needed clearance from the Chinese authorities and the Committee on Foreign Investment in the United States, which can recommend transactions be blocked if they pose a risk to national security.

According to one of the Chinese buyers, the key concern for the US authorities centred on user privacy, and a probe would have delayed the deal for up to a year.

The partial takeover "was because of Opera's other services, and involves very many users' privacy. This would be extremely rigorously investigated during the US government's audit and probably would have delayed the entire acquisition process by six months to a year", a Kunlun spokesman said in a statement.

"So we opted for a better method, and chose Opera's core assets, namely the consumer business, as the target of the acquisition. That greatly accelerates the acquisition process."

Opera shares fell 17 per cent to 50 kroner each yesterday morning on news of the announcement, valuing the company at 7.3 billion kroner (S$1.15 billion).

The buyer group's original bid in February for all of Opera was 71 kroner a share, which at the time was a 46 per cent premium to the latest closing price.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 19, 2016, with the headline 'Opera Software plans partial sale to Chinese group'. Print Edition | Subscribe