Beijing
Tencent Holdings Ltd. and JD.com Inc. agreed to invest $863 million (Dh3.17 billion) in online retailer Vipshop Holdings Ltd., setting up an alliance between China’s largest social media company and two major players in e-commerce.
Tencent and JD will pick up Vipshop Class A shares at $65.40 apiece (equivalent to $13.08 per American Depositary Share), the two companies said in an emailed statement. That’s about a 55 per cent premium over Vipshop’s Friday close. After the deal is completed, Tencent and JD will own about 7 per cent and 5.5 per cent of Vipshop’s total issued stock respectively.
The tie-up combines JD’s strengths in electronics with Vipshop’s long-standing expertise in fashion, as well as Tencent’s enormous online reach through its ubiquitous WeChat messaging app. JD, in which Tencent already owns a significant stake, has been trying to expand its online offerings and logistics network to compete with dominant e-commerce giant Alibaba Group Holding Ltd.
“The strength of Vipshop’s flash sale and apparel businesses, as well as its outstanding management team, create clear and strong synergies with us,” said JD Chairman Richard Liu. “This partnership will further extend the strong inroads that we have made with female shoppers, and will expand the breadth and reach of our fashion business.”
– Bloomberg
