June 28 (Bloomberg) -- Tencent Holdings Ltd. agreed to buy a 19.9 percent stake in 58.com Inc. for $736 million, as Asia’s largest Internet company adds to investments this year that include purchasing a stake in e-commerce website JD.com Inc.
Tencent will buy 36.8 million Class A and B ordinary shares in Chaoyang, China-based 58.com at $20 each, according to a statement distributed through PR Newswire yesterday. The two companies also agreed to use each other as preferred partners for local services, according to the statement.
The investment in 58.com, which provides online classified ads, will expand the choice of local services and merchants available to Tencent users, according to the statement. The tie-up will help build 58.com’s user base by capturing traffic from Shenzhen-based Tencent’s messaging services WeChat and QQ, the companies said.
Tencent is adding games and advertising services to messaging applications including WeChat, known as Weixin in China, as it competes with Alibaba Group Holding Ltd. and Baidu Inc. The company is counting on its apps and games like Blade & Soul and Candy Crush Saga to win a bigger slice of China’s 618 million Internet users as they migrate toward content on smartphones.
Tencent in March agreed to buy a 15 percent stake in JD.com and transfer some of its own assets to build a stronger competitor to Alibaba. In February, it acquired 20 percent in Dianping, the operator of a Yelp-like website in China, to strengthen location-based services.
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