Shanghai-based China Literature is one of the country’s largest online literature platform. It owns nine major branded products and its flagship is QQ Reading, a mobile aggregation and distribution platform. Tencent holds a controlling stake in the company.
OBU, on the other hand, is a Thailand-based startup that is principally engaged in the business of providing online literature and digital lifestyle content through various online platforms. Tencent also holds a 42-per cent stake in OBU.
Tencent launched OBU as a joint venture with Ookee, which was founded in Thailand as an e-books and magazines startup across southeast Asia with presence in Thailand, Vietnam, the Philippines, and Malaysia.
In its filing, China Literature said it has agreed to acquire, through its wholly-owned subsidiary Cloundary, the 20-per cent stake in OBU from Kapok Tree and Ookbee, which own 58 per cent and 42 per cent of OBU, respectively.
When the deal is completed, Ookbee will continue to be the majority shareholder with 51 per cent stake while Kapok Tree and Cloudary will hold 29 per cent and 20 per cent, respectively.
Additionally, Cloudary and Ookbee will establish a 60:40 joint venture company to better explore potential opportunities and penetrate the Thailand online literature market.
China Literature expects Thailand’s online literature market to grow at a fast pace, with increasing awareness about online literature and its market potential among Internet users, content creators, local publishers, and foreign content providers.
With approximately 57 million Internet users, Thailand has one of the highest Internet penetration among ASEAN countries, while its high-speed Internet cost is one of the lowest, according to data cited by China Literature.
Last year, China Literature agreed to buy New Classics Media (NMC) for 15.5 billion yuan ($2.3 billion). NCM is a renowned TV series, web series, and film producer in China.
Bloomberg reported in May that China Literature’s shares tumbled as China expands its crackdown on online content.