Under an agreement that was signed yesterday, e-commerce and life services platform Meituan has allotted 11.35 million shares to Tencent. This will increase Tencent Subscription Shares to 0.2% of the company’s issued share capital. Prior to the deal, Tencent held a 17.3% of stake in Meituan.
The net proceeds from the agreement are estimated to be $400 million which Meituan plans to use to invest in technological innovation, including research and development into driverless vehicles and drone distribution.
Founded in Beijing in 2011, Meituan is a leading e-commerce platform that offers services, including catering, takeaway, fresh food retail, taxi rides, shared bicycles, and hotels.
The deal will further expand Tencent’s presence in different industries. Just yesterday, regulators approved Tencent’s plans to privatise Chinese search-engine provider Sogou.