The Norwegian company, Opera, is selling some of its core products to a Chinese consortium for a $600 million deal. This news comes after the same consortium of Chinese investors proposed a $1.2 billion takeover of Opera last week.
Opera put itself up for sale from August. The company hired Morgan Stanley to find investors who would be ready to buy it. The decision to sell the company is probably fueled by the company’s loss in sales and market share. Opera has suffered reduced ad sales in the past year.
In the new deal, Opera will sell the name, the browsers (desktop browser and mobile browser), and privacy and performance tools. The deal includes the SurfEasy VPN tool that is currently built into the browser. Opera acquired the VPN in March 2015.
Opera will hold on to Opera TV, Opera Apps and Games and Opera Mediaworks. Opera Apps & Games units do quite well; they generated a combined profit of $74 million in 2015 according to the company. Opera has debts amounting to $285. It is logical to think that Opera plans to pay the debts after completing this deal with the Chinese consortium.
The consortium purchasing the Opera products includes Beijing Kunlun Tech, an internet firm, and Qihoo 360, a Chinese cyber security firm that faced a gaming anti-malware scandal last year. Others in the consortium include private equity funds such as Golden Brick Capital and several Chinese fund managers.
The consortium is obliged to pay a contract termination fee of $100 million should it back off from the deal. Lars Boilsen, Opera’s CEO is to maintain his role up to the end of the year. From 2017, he will only be chief executive officer of the businesses Opera retains.
In 2013, Opera decided to shift from Presto rendering engine to Google’s open source Chromium project. The decision resulted in the loss of customers who preferred the previous browser technology. The chromium technology lacks some of the feature Opera’s hardcore users were accustomed to. Opera justified the decision to shift to Chromium project by claiming that the Presto code had become obsolete and expensive to maintain compared to chromium. Furthermore, acquiring Canadian-based SurfEasy VPN did not generate the expected user subscription.
After the change in browser technology, Opera lost a significant number of loyal users. Vivaldi, a web browser launched by Opera founder, Jon Von Tetzchner, released a beta version earlier in the year. The beta version of Vivaldi includes most of the features ditched by Opera in 2013.