Tencent buys 20%stake in Dianping

Chinese Internet company Tencent announced on Wednesday that it had purchased a 20-percent stake in the country's lifestyle and group buying website Dianping.com. The two companies will integrate Dianping's content, user base and offline retailer network with Tencent's social communications platforms, such as QQ and Wechat, to build an online-to-offline service, according to a joint statement. The integration will provide users with a better experience of local services. "Dianping will continue to operate independently under the current leadership team," said Zhang Tao, CEO of Dianping. "Dianping will seek an independent initial public offering (IPO) in the future," he said. "Cooperating with Tencent will help us provide better user experience and merchant service capability, accelerating our national expansion, especially in tier three and tier four cities," Zhang said. Tencent also holds an option to purchase an additional 5 percent of Dianping within a year, when the latter launches its IPO overseas, according to a filing to the Hong Kong stock exchange Tencent did not disclose the cost of the transaction, but China Business News reported on Monday that the company had paid 400 million U.S. dollars. Tencent made the announcement after the close of the Hong Kong stock exchange. Tencent shares closed at 582.5 HK dollars (75.2 U.S. dollars), down 0.34 percent on the day. Dianping provides merchant listing, consumer review, group buying and restaurant reservation services. It had over 90 million monthly active users and more than 30 million reviews covering 2,300 cities by the end of 2013, according to its website. Tencent is actively promoting its mobile payment system on its flagship mobile messaging application Wechat, which has more than 600 million users.