China's most valuable Internet firm, Tencent Holdings, has agreed to invest $300 million in Digital Sky Technologies, giving the Chinese firm exposure to social-networking giant Facebook, the companies said in a joint statement Monday.
The deal will give Tencent a 10.26 percent economic interest in DST, which paid about $300 million for a 3.5 percent stake in U.S. Internet darling Facebook last year.
"DST and Tencent will embark on a long-term partnership and cooperation as they seek to benefit from each other's insights gained from their respective markets," the statement said.
Tencent will take a stake equivalent to about 0.51 percent of DST's voting shares, the statement said. It will also get to nominate one nonvoting observer to DST's board.
A source close to DST's shareholders told Vedomosti on Monday that Yury Milner and Grigory Finger would remain the company's main shareholders and that Tencent purchased a secondary share issue. Milner and Finger had owned 50 percent of DST, while Alisher Usmanov's New Media Techonologies had 35 percent, the newspaper reported on its web site.
In addition to DST's pursuit of Facebook, which valued the private company at some $6.5 billion, DST also led a $180 million investment in social-game maker Zynga late last year. It also has stakes in social networking sites Odnoklassniki.ru, Vkontakte.ru.
Vedomosti reported last week that DST, Tencent and Russian holding Prof-Media submitted binding offers for AOL's instant-messaging service ICQ.
"We're glad to welcome Tencent into our shareholders," Milner, DST's chief executive, said in the statement. "We share common views and impressions of the possibilities that exist on the market today."
Tencent's president, Martin Lau, said the company was hoping for "long-term partnership" with the Russian holding. "This investment will allow us to earn on the quick growth of Russian Internet, and also, thanks to our technologies and operational know-how, strengthen DST's leading positions."
(Reuters, MT)
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.