Alibaba competitor adds to its local and location services armoury in finance deal
Chinese web service portal, Tencent signed a deal to acquire 19.9% stake in online marketplace 58.com for $736m, expanding its online-to-offline (O2O) services eCommerce ecosystem, involving Dianping, Didi Dache, JD.com and Leju.
The deal will enable 58.com to solidify its consumer dominance by attracting traffic from Tencent's messaging services including QQ, Weixin (WeChat), QQ.com, and QQ browser as well as expanding the option of local services and merchants currently accessible to Tencent users.
The aim is for the integration of 58.com's services into messaging services to bolster the online marketplace's user base and offer consumers access to social tools and suggested merchants.
Tencent with acquire 36,805,000 Class A and B ordinary shares at $20 per ordinary share. 58.com will use the funds to repurchase 27,603,750 ordinary shares from active pre-IPO investors.
Prior to the current deal, Shenzhen-based Tencent racked up about $258.5m in M&A deals during the second quarter of the year.
In March, it signed a deal to buy 15% stake in JD.com and transfer some of its own assets to take on Alibaba and also acquired 20% in Dianping to reinforce its location-based services.