One of China's top online marketplaces, 58.com, announced that it acquired Anjuke, a major online real-estate listing platform. Reports showed the acquisition is worth 267 million yuan.
With the acquisition of Anjuke, 58.com becomes China's largest secondary and rental real-estate platform. The combination of 58.com's housing content and the listings of Anjuke made this possible.
Founded in 2007 in Shanghai, Anjuke was one of the premier Chinese real-estate search engines for both residential sellers and renters.
Apart from Anjuke and 58.com, a merge is also taking place within the sector. Beijing's largest real-estate agency, Homelink, has entered into a merger with Dooioo, a Shanghai-based high-end real-estate agency. Their merger led to the creation of a brand called "New Homelink." With this merger, Homelink would have the chance to tap into Shanghai market and boost their market share in the city.
Since 2011, real-estate companies have had to struggle with an increasingly volatile market because of oversupply in homes, particularly in smaller cities. House sales slumped by 7.8 percent across the nation in 2014. Prices of houses in smaller cities saw the most decline, squeezing the profits of real-estate companies.
This year, average home prices across 100 Chinese cities fell nearly by 4 percent from 2014. The emergence of many e-commerce companies also added to the volatility.
Because of these changes and uncertainties in the market, Chinese real-estate companies are finding it necessary to engage in M&As to combat the effects of a possible long-term property downturn.