(Reuters) – China’s largest internet company Tencent has agreed to spend $180 mln on a 15 percent stake in online services provider Leju Holdings, stepping up its rivalry with fellow online heavyweight Alibaba Group.
Tencent also agreed to subscribe to additional Leju shares in a proposed initial public offering (IPO) to maintain the 15 percent equity interest, it said in a joint statement with Leju’s owner, real estate services group E-House.
The initial Tencent transaction is expected to close this month, the companies said, and E-House has already filed a draft registration with the U.S. Securities and Exchange Commission for the IPO.
Tencent’s investment brings it a step closer to territory controlled by e-commerce leader Alibaba as both groups, along with search engine company Baidu Inc, race to attract more business from China’s 500 million mobile Internet users. China is the world’s biggest smartphone market.
The strategic partnership with Leju will bring valuable real estate information to users of Tencent’s WeChat mobile app while expanding its payment service to the Leju user base, Tencent President Martin Lau said in a statement.
E-House provides services to China’s property industry, including online advertising and e-commerce, primary sales and real estate investment management.