Alibaba will buy a minority stake in Focus Media to leverage digital marketing

HONG KONG (Reuters) – Chinese e-commerce giant Alibaba Group Holding Ltd announced on Wednesday that it has agreed to acquire a minority stake in the Chinese company Focus Media Information Technology Co Ltd <002027.SZ>to leverage the digital marketing sector.

Alibaba will acquire about 6.62 percent of Focus Media for 9.63 billion yuan ($1.43 billion) and likely another 5.0 percent stake in the next 12 months, the statement said.

The e-commerce company will also invest $511.1 million in an entity controlled by Focus Media CEO Jason Jiang, subscribing to newly issued shares, it said.

Focus Media, founded in 2003, operates primarily in the interactive digital media and online advertising sectors in China.

Once the transaction is finalized, Alibaba will become a strategic investor in Focus Media, the Shenzhen-listed company said in a separate stock exchange filing.

(This version of the story corrects currency conversion in second paragraph)

(Reporting by Twinnie Siu in Hong Kong and Lee Chyenyee in Singapore; Editing by Elaine Hardcastle)