Tencent pays $115m for 15% stake in Chinese software company
Chinese software company Kingsoft has agreed to sell a 15.68% stake to leading internet platform Tencent for HK$892 million ($115 million). Tencent will also invest $20 million in Kingsoft’s internet security subsidiary, which counts Matrix Partners China among its investors.
Kau Pak Kwan, founder and CEO of Kingsoft, will sell 111.5 million shares to Tencent, while a further 66.9 million shares will come from Cheung Shuen Lung, a non-executive director. As a result, Tencent will become the single largest shareholder in the company, with Kau's stake falling from 19.33% to 9.54% and Cheung's interest falling from 8.93% to 3.05%.
Matrix Partners is not listed as a substantial shareholder - i.e. with a stake in excess of 5% - in Kingsoft Corporation, which trades in Hong Kong. However, it is an investor in Kingsoft Internet Security, according to the venture capital firm's website.
"We believe the technologies and businesses of Kingsoft and Tencent are highly complementary. The strategic partnership can combine our security technologies and operational strengths in the Internet industry, bringing the Chinese Internet users more trustworthy internet security services and safer online experiences." said Ma Huateng, chairman and CEO of Tencent.
Earlier this year, Kingsoft supported Tencent in its row with antivirus software producer Qihoo 360. Qihoo was said to control 70% of the antivirus software market through its free-to-download 360 Guard product. Tencent then automatically installed its rival QQ Doctor product on all machines running its popular QQ instant messaging service, quickly snatching up market share. The government had to intervene to settle the spat.
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