Opera receives $1.2 billion buyout offer, accepts the deal

Posted Feb 10, 2016 by James Walker
Internet company Opera has confirmed it has been approached by a consortium of Chinese firms interested in purchasing it for $1.2 billion. Opera, best known for the web browser of the same name, has indicated it will accept the offer.
The Opera web browser
The Opera web browser
Re/code reports Chinese Internet companies Kunlun and Qihoo 360 have received backing from investment funds Golden Brick and Yonglian to make the deal. If confirmed, it would value Norway-based Opera at $1.2 billion, a 53 percent premium based on its trading price before the buyout was announced.
Opera makes some of the world's leading data compression technologies which it uses in its web browsers to reduce the amount of data required to load a page. The company has begun to extend its expertise into other directions, developing new video compression algorithms to help reduce the huge filesizes of high-definition and 4K content.
Opera's core consumer-facing product is the Opera web browser. It continues to struggle to gain market share though, currently holding just 1.07 percent for its latest version. Opera users are generally loyal to the platform but the company has difficulty in convincing others to make the switch. Despite its troubles on desktop devices, the company has been much more successful on mobile phones.
Opera Mini was one of the first full-featured web browsers to arrive on mobile devices. It uses Opera's webpage compression technology to drastically reduce the size of webpages delivered to the user's phone, lowering data usage and cost. Opera has struggled to keep up in the age of smartphones though and now focuses more intently on developing its compression algorithms further.
The Chinese group is said to be interested in making Opera's technology available in China. Current users of Opera products are likely to see benefits as well because its software will gain security for the future. Opera developers will be able to return to innovating with new ideas, using the resources provided by the Chinese investors.
The offer has been unanimously welcomed and accepted by Opera's board and shareholders. In a statement, Opera CEO Lars Boilesen said: "There is strong strategic and industrial logic to the acquisition of Opera by the Consortium. The Consortium's ownership will strengthen Opera's position to serve our users and partners with even greater innovation and to accelerate our plans of expansion and growth."
Opera today published its fourth-quarter financial results, posting a record $193.5 million in sales and $32.8 million in profit. The increase came based on strong growth in its mobile advertising business, a division of Opera that its browser users never get to see.
The Consortium's offer will need to be approved by Opera's board and local regulatory officials before it is completed. Opera will unanimously "recommend" agreeing to the deal to its shareholders. No timeframe has been provided for when the buyout could be completed.