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Alibaba Group Holdings Ltd. (NYSE: BABA) announced Friday that the China-based e-commerce giant will acquire the country’s leading video streaming company, Youku Tudou Inc. (NYSE: YOKU), for $27.60 in cash per American depositary share (ADS). Alibaba increased its offering price by $1.00 per ADS above the offer it made on October 16. One Youku Tudou ADS is equal to 18 Class A ordinary shares.

At Friday’s announced price the deal is worth about $3.67 billion, net of $1.1 billion of Youku Tudou cash, for the 71.7% of Youku Tudou that Alibaba does not already own.

According to the announcement, the price represents a premium of 35.1% over the closing price of Youku Tudou’s ADSs on October 15, 2015, one day prior to the date that Youku Tudou announced it had received a “going private” proposal from Alibaba, and a premium of 49.9% to the volume-weighted average closing price of Youku Tudou’s ADSs during the three months prior to October 15, 2015.

The transaction is expected to close in the first quarter of 2016, subject to customary closing conditions, including the affirmative vote of the shares of Youku Tudou representing at least two-thirds of the shares. Alibaba has entered into a support agreement with Youku Tudou’s Founder, Chairman and Chief Executive Officer Victor Koo, Chengwei Capital and various entities affiliated with them, pursuant to which such shareholders have agreed to vote all the ordinary shares of Youku Tudou beneficially owned by them in favor of the deal and against any competing transaction in accordance with the terms of the support agreement. Alibaba and the parties to the support agreement collectively beneficially own approximately 60.6% of the total voting power of the Youku Tudou shares.

When Alibaba first announced an offer for Youku Tudou on October 16, we wondered whether this was the death knell for Netflix Inc.’s (NASDAQ: NFLX) opportunity in China. Alibaba already owns a movie production company and has launched a preliminary version of a subscription video streaming service.

Netflix had hoped to launch in China by 2016, but in July CEO Reed Hastings admitted to having trouble getting government clearance and finding the required partners to operate in China. Even at that, Netflix had only planned a “modest” streaming subscription service in China.

Alibaba stock traded up about 0.3% in the premarket, at $85.64 in a 52-week range of $57.20 to $120.00.

Youku Tudou’s ADSs traded up nearly 9%, at $26.55 in a 52-week range of $11.85 to $31.50.

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