China-based internet company Tencent is set to acquire a 28% stake in Korea-based online games developer CJ Games for $500m.
Tencent is currently China’s largest provider of online games through its gaming portal, QQ Games, and the investment in CJ Games represents an attempt to take a larger share of the supply end. It said in a statement that the purchase will also enable CJ to compete more heavily in the Chinese and other international markets.
The funding means that Tencent is now CJ Games’ third largest shareholder, after Bang JH and CJ E&M, an entertainment and media subsidiary of Korea-based conglomerate CJ Group. As part of the deal, the Chinese company will also take control of CJ E&M-owned gaming portal Netmarble.
The move comes as Tencent is attempting to expand in order to compete with its two main rivals in the Chinese mobile content market, internet and e-commerce company Alibaba, which has itself been embarking on a major acquisition spree of late, and web services provider Baidu.
Tencent paid $215m for a 15% stake in China-based e-commerce site JD.com earlier this month, and led a $22m round for Iceland-based games developer Plain Vanilla in December.