Jack Ma’s e-commerce giant Alibaba has made an offer to acquire all of Chinese web video giant Youku Tudou in a deal that values the company at $4.2 billion. Dubbed China’s You Tube and one of its two biggest video streamers, Youku Tudou had already received a strategic investment of $1.2 billion from Alibaba in May 2014 in return for a 16.5% stake. By seeking to take full control of the company, Jack Ma is making a play to establish his online behemoth as the major digital player in the Middle Kingdom. Youku Tudou, formed by the 2012 merger of Youku and Tudou, is listed in New York. The share price was up by more than 4% in pre-market trading to $20.41 a share.

In a statement, Alibaba announced it making an non-binding offer of US$26.6 per ADS of Youku Tudou, which it says is 30% above the ADS’recent trading price. The deal will be funded entirely with cash. Youku shareholders, including founder Victor Koo and Chengwei Capita, are believed to supportive of the takeover bid, and have agreed to vote in favour.

The competition between China’s online players is intense between Tencent, Baidu subsid iQIYI and Alibaba (a triumvirate dubbed BAT). Yesterday, iQIYI announced it planned to boost its paid subscriptions by buying or producing 40 new shows in 2016, and would be prepared to spend half of its annual budget on new content. A week earlier, iQIYI announced a VOD deal with Lionsgate granting it the rights to films including the Hunger Games and Divergent series.

The Youku Tudou board has formed a special committee, including two independent directors, to evaluate the potential buyout with independent legal and financial advisors also on-board to advise.