Tencent spinoff China Literature to buy New Classics Media for $2.2B in content consolidation play

TechCrunch | 8/13/2018 | Staff
jolan (Posted by) Level 3
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As the consumer appetite for digital entertainment in China continues its rapid growth, two companies are combining forces to step up their game in the space. Today, China Literature — the Tencent e-publishing venture that went public with a $1 billion IPO last November — announced that it would acquire Chinese digital production company New Classics Media for about $2.2 billion (RMB15.5 billion).

This is a consolidation of sorts not just in digital media, but in Tencent’s content interests: New Classics Media had been eyeing up an IPO of its own but instead picked up Tencent as an investor just in March of this year, when the Internet and messaging giant paid $524 million for a 27.64 percent stake in the company. That deal valued NCM at about $1.9 billion. In other words, this represents a small but clear return for Tencent, which it most notably owns messaging giant WeChat but is also an investor in Snap, Uber and a number of other companies and is sometimes called the “Softbank of China”.

China - Literature - Content - Partner - Tencent

China Literature already was a strong content partner of Tencent’s using its Tencent Video, WeChat and other channels to distribute China Literature content; now it will ramp that up with more video based on China Literature’s material from a partner that has a string of successful blockbusters — titles include Some Like It Hot, Never Say Die and Goodbye Mr. Loser — as well as TV and web shows such as The First Half of My Life, White Deer Plain, The Kite, The Imperial Doctress and Yu Zui.

Indeed, the deal is bringing together one of the bigger original content developers (China Literature) with one of the bigger video content producers (NCM) in the region. China Literature, according to its half-year results also out today, said that its monthly active...
(Excerpt) Read more at: TechCrunch
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