Tencent to acquire 15 pct stake in Kingsoft
Beijing. July 7. INTERFAX-CHINA - Tencent Inc., a leading Internet firm in China, has agreed to invest HKD 892 million ($114.62 million) for a 15.68 percent stake in Hong Kong Stock Exchange-listed Kingsoft Corp. Ltd., Kingsoft announced July 6.
The deal will enable Kingsoft to better compete with rival Qihoo 360 Technologies Co. Ltd. (Qihoo 360) by promoting its antivirus software and online gaming titles to Tencent's 674 million users, said Yu Yi, an analyst with Beijing-based consultancy Analysys International.
Tencent will purchase 111.45 million Kingsoft shares from Qiu Bojun, Kingsoft's former chief executive officer (CEO), and 66.94 million shares from Zhang Xuanlong, a non-executive director at Kingsoft, according to the announcement.
Tencent intends to complete the acquisition on July 7, which will make it Kingsoft's second-largest shareholder. Topclick Holdings Ltd., owned by Qiu, is the largest shareholder with a 19.57 percent stake.
In November 2010, Tencent disabled its QQ instant messaging tool on computers using Qihoo 360's software after reports that the program was interfering with QQ.
Tencent already has a stake in Kingsoft subsidiary Kingsoft Internet Security Co., Ye Guozhen, a Tencent media representative, told Interfax July 7, without providing further details.
Kingsoft's shares on the Hong Kong bourse closed at HKD 5.48 ($0.74) after morning trading on July 7, up 9.60 percent from the previous trading day.
-RL
