China-based internet company Tencent acquired an 8% stake in China-based entertainment company ChinaVision Media Group on Monday last week for HK$247m ($31.8m).
Martin Lau, president of Tencent said: "We are excited to become ChinaVision’s strategic investor and partner. Under the collaboration of both parties, we believe we can realize the synergies that this partnership can bring in future."
The funds raised from the stake sale will be used to strengthen ChinaVision’s working capital base as the company integrates its online and offline media content.
As part of the subscription agreement signed by Tencent and ChinaVision, Tencent will promote ChinaVision productions on its QQ instant messaging service and web portal. ChinaVision’s film and TV content will also be distributed online through Tencent’s video platform while the two firms plan to co-produce additional premium content.
The stake purchase came as ChinaVision acqured China Entertainment Media Group (CEMG) for HK$2bn. While ChinaVision’s strengths lie in print and mobile media, CEMG’s ouput is concentrated in film and TV production.
Through the acquisition, ChinaVision is looking to become an amalgamated media company able to compete across platforms while also taking advantage of the growing domestic cinema market in China.
Dong Ping, chairman of ChinaVision said: "This acquisition will allow ChinaVision to perfect its footprint in the media value chain and become one of the few players in the industry with both the assets to produce premium content and multiple media platforms to distribute content. Today’s announced transaction will also enhance the Group’s future profitability and deliver strong returns for our shareholders."