Chinese B2C e-commerce company JD.com has formed a strategic partnership with China's largest internet company Tencent Holdings to further grow the e-commerce sector in the country.
JD will become Tencent's preferred partner for all physical goods e-commerce businesses. Martin Lau, President of Tencent, will join JD's Board of Directors.
As part of the transaction, JD will acquire 100% interests in Tencent's QQ Wanggou B2C and PaiPai C2C marketplace businesses, logistics personnel and assets, a minority stake in Yixun, and will enter into a strategic cooperation agreement with Tencent. In addition, JD has the right to acquire the remaining stake of Yixun in future.
As part of the strategic cooperation, Tencent will support JD's growth in the physical goods e-commerce sector by offering level one access points in Weixin and Mobile QQ, and support from other key platforms to JD. Both parties will also cooperate on online payment services to improve users' online shopping experience.
In connection with the transaction, JD will issue new shares to Tencent. Initially, Tencent will hold approximately 15% in JD upon closing of the transaction. Furthermore, Tencent will subscribe at IPO price for an additional 5 percent of JD on a post-IPO basis. The IPO subscription is expected to close concurrently with JD's IPO.