Digital

Tencent Buying Stake in Digital Mapping Provider NavInfo For $187 Million

May 06, 2014 2:00 am

Reuters  / Bobby Yip

Tencent's headquarters is seen at Nanshan Hi-Tech Industrial Park in the southern Chinese city of Shenzhen. Reuters / Bobby Yip


Tencent Holdings Ltd., Asia’s biggest Internet company by market value, will buy a stake in digital mapping provider NavInfo Co. for 1.17 billion yuan ($187 million), after Alibaba Group Holding Ltd. announced a similar deal earlier this year.

Tencent, owner of the WeChat instant messaging application, will buy 78 million NavInfo shares, an 11.3 percent holding, from that company’s state-owned parent China Siwei Surveying & Mapping Technology Corp., according to a Shenzhen Stock Exchange filing yesterday. Siwei’s stake will fall to 12.6 percent.

The purchase may help Tencent defend services such as restaurant recommendations against Alibaba, China’s largest e- commerce company, which is buying AutoNavi Holdings Ltd. in a deal that values the nation’s most popular mobile mapping provider at $1.5 billion.

“Alibaba is trying to compete with Tencent for location- based services,” Ricky Lai, an analyst at Guotai Junan International Holdings Ltd. in Hong Kong, said in February. “Buying AutoNavi fully will help better integrate and monetize the business.”

Alibaba, which is preparing for a U.S. initial public offering, is seeking to win more of China’s 618 million Internet users with services for smartphones and tablet computers. Baidu Inc., owner of China’s largest Internet search engine, has its own mapping service.

 

–With assistance from Suker Wu in New York.

 

To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net James Callan, John Lear

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