58.com To Buy 43.2% Stake In Ganji.com, Announces Addl Investment By Tencent

(RTTNews) - Chinese online marketplace 58.com, Inc. (WUBA) agreed Friday to acquired a 43.2 percent strategic stake in Falcon View Technology Ltd. or Ganji, in a cash and stock deal.

The deal is part of an intended long-term, strategic combination to maximize business synergies and capitalize on opportunities to cooperate and further expand their businesses.

The deal will see 58.com acquiring the stake for a combination of share consideration and cash, including about 34 million newly issued ordinary shares and $412.2 million in cash.

Ganji is the holding company of the PRC entities operating Ganji.com, a major online local services marketplace platform in China.

Following the stake purchase, the two companies will continue to operate their respective brands, websites and teams.

Concurrently, 58.com also announced an additional $400 million investment by Tencent Holdings Ltd. (TCEHY), a leading provider of Internet services in China. The deal will see Tencent increasing its existing share ownership in 58.com to an aggregate of about 25.1 percent of the total issued and outstanding shares of 58.com on a fully-diluted basis at a purchase price equivalent to $52 per ADS.

Both the 58.com-Ganji strategic deal and the Tencent Investment are expected to close within a few days, subject to customary closing conditions.