Bob van Dijk, Managing Director of Naspers Ltd.
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Europe has lamented the shortage of major Internet technology companies that can compete with US and Chinese giants like Google, Facebook, Alibaba and Tencent.
Overnight, the fate of the continent changed in the form of a $ 100-billion Internet for consumer companies, which is listed on Wednesday in Amsterdam on the stock exchange.
The company is called Prosus and is a spin-off of the South African Internet consumer conglomerate Naspers. Prosus said its market capitalization on the first day of trading was around $ 1
"Prosus' listing is an exciting step forward for the group, providing global technology investors have direct access to our unique and attractive portfolio of international internet end-user companies," said Bob van Dijk, CEO of Naspers and Prosus Group a press release from Wednesday.
Prosus is not an Internet company for end users, ie it does not offer digital services under its own brand such as Facebook or Alibaba for example. Instead, the company invests in a portfolio of global Internet companies in sectors ranging from payments and fintech (financial technology) to food delivery.
The group's best-known investment is 31% of Chinese technology giant Tencent, a gaming titan and owner of the hugely popular WeChat messaging app. Naspers made a $ 32 million investment in Tencent in 2001, a $ 130 billion investment.
Under the new structure, Prosus will acquire Naspers Tencent stake as well as positions in other companies such as the Russian social media company Mail.ru Group and German food delivery Delivery Hero. Naspers remains the majority shareholder of the new company.
Europe catching up
The addition of Prosus to the Amsterdam Stock Exchange shakes up the European technology landscape, and the company is now becoming one of the largest tech entities in the region. According to Reuters, it has been surpassed only by the German software company SAP with a value of about 135 billion US dollars.
Europe has followed the US and China as the headquarters of large technology companies. According to data from the World Economic Forum in 2018, none of the 20 largest Internet companies in terms of value had its headquarters in Europe. Last month, it was reported that the EU had prepared a plan for a sovereign wealth fund that would invest in "high-potential European companies" that could compete with major US and Chinese technology companies.
"Naspers Believes Euronext Amsterdam's Choice This is and will continue to be beneficial to the company, as the Euronext markets are among the largest, most integrated and proven capital markets in Europe," states its prospectus.
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Naspers first announced its intention to list its international Internet assets in March on the Amsterdam Stock Exchange under the new company name Prosus. Prosus also has a secondary listing on the Johannesburg Stock Exchange. Analysts said one of the reasons for the decision was that Naspers had an excessive weight on the Johannesburg Stock Exchange.
By being quoted directly on the Amsterdam Stock Exchange, the Prosus listing has not received as much attention, according to Ken Rumph, a US Treasury Secretary, as a traditional IPO stock analyst at Jefferies covering Naspers. As part of the listing, existing Naspers shareholders receive new Prosus shares.
"As a publicly traded company in Europe, there is a larger investment pool, plenty of passive money, and indices you could be involved in," Rumph said Tuesday. "There is a kind of tactical argument that this is a cheaper venue."
Prosus is traded under the ticker symbol "PRX".