Tencent to buy Kingsoft stake
By Ding Yining |
July 8, 2011, Friday
|
Print Edition
Print Edition
CHINA'S largest Internet company Tencent Holdings said it will pay US$115 million for a 15.68 percent stake in Hong Kong-listed software developer Kingsoft Co Ltd as it extends its business beyond online chatting and Internet games.
Tencent will buy 178.4 million shares from two of Kingsoft's executives, the two companies said in a joint statement late on Wednesday.
"The strategic partnership can combine our security technologies and bring Chinese Internet users more trustworthy Internet services and safer online experiences," said Tencent Chairman and CEO Ma Huateng.
Last month, Tencent said it will double the size of its Tencent Collaboration Fund to 10 billion yuan (US$1.54 billion) to support third-party service operators and technology developers to expand web-based services.
The company is aiming to bring more than 600 million users of QQ, a chat program, more services ranging from e-commerce to computer security with the help of partners.
Shares of Kingsoft surged as much as 19 percent in the morning session before closing at HK$5.44, a gain of 8.8 percent.
Tencent also made a strategic investment in Kingsoft Internet Security Software, an Internet security services provider under Kingsoft Corporation Limited.
Kingsoft Internet Security is also expected to embed its service in Tencent's web-based products including QQ and social network Qzone.
Credit Suisse wrote in a research note yesterday that the partnership with Kingsoft Internet Security will enable Tencent to fend off competition from Qihoo360 and it rated Tencent shares as "outperform."
Tencent shares rose 0.09 percent to HK$214.80 yesterday in Hong Kong.
Earlier this year, Tencent bought a 16 percent stake in China's second largest online travel booking website eLong and a 4.6 percent share of film maker Huayi Brothers Media.
Other Internet giants including Baidu are actively making investments to diversify services and to benefit from the boom in online spending.
Tencent will buy 178.4 million shares from two of Kingsoft's executives, the two companies said in a joint statement late on Wednesday.
"The strategic partnership can combine our security technologies and bring Chinese Internet users more trustworthy Internet services and safer online experiences," said Tencent Chairman and CEO Ma Huateng.
Last month, Tencent said it will double the size of its Tencent Collaboration Fund to 10 billion yuan (US$1.54 billion) to support third-party service operators and technology developers to expand web-based services.
The company is aiming to bring more than 600 million users of QQ, a chat program, more services ranging from e-commerce to computer security with the help of partners.
Shares of Kingsoft surged as much as 19 percent in the morning session before closing at HK$5.44, a gain of 8.8 percent.
Tencent also made a strategic investment in Kingsoft Internet Security Software, an Internet security services provider under Kingsoft Corporation Limited.
Kingsoft Internet Security is also expected to embed its service in Tencent's web-based products including QQ and social network Qzone.
Credit Suisse wrote in a research note yesterday that the partnership with Kingsoft Internet Security will enable Tencent to fend off competition from Qihoo360 and it rated Tencent shares as "outperform."
Tencent shares rose 0.09 percent to HK$214.80 yesterday in Hong Kong.
Earlier this year, Tencent bought a 16 percent stake in China's second largest online travel booking website eLong and a 4.6 percent share of film maker Huayi Brothers Media.
Other Internet giants including Baidu are actively making investments to diversify services and to benefit from the boom in online spending.
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