Alibaba to buy 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 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 possibly another 5.0 percent in the next 12 months, the company said in a statement.

The e-commerce company will also invest $511.1 million in an entity controlled by Focus Media CEO Jason Jiang through a subscription for newly issued shares, the company said.

Focus Media, founded in 2003, is principally engaged in China’s interactive digital media and online advertising sectors.

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

($1 = 6.7161 Chinese yuan)

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

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