Deals of the week: Tencent back in the spotlight and AT&T sells Movil interests

Just as we were becoming concerned by the lack of activity coming out of China’s hyperactive digital giants, Tencent has broken the tension with a sizeable purchase of a 20% stake in 58.com. Tencent might well be taking advantage of its rival Alibaba’s quiet period in the run-up to its hefty IPO. In other deals, Latin American major America Movil bought back its stake from US telecoms giant AT&T, leaving the companies free to compete in emerging markets. Finally, Belgian media holding De Persgroep bought out struggling UK publisher Mecom Group as London corporate finance turned away from the company.

Tencent expands presence in online classifieds

Chinese e-commerce major Tencent has further diversified its huge portfolio by purchasing a 20% stake in online classifieds company 58.com for $736 million. The company continues to look for new investments in a Chinese market that has few major interests left untouched by one of three local giants, Baidu, Alibaba and Tencent. Despite a growing interest in foreign ventures, all three companies continue to invest primarily at home. Tencent’s latest deal is aimed at bolstering its online content and increasing its presence in China’s e-commerce sector as it looks to compete more closely with Alibaba. In turn, 58.com is set to benefit from the generated traffic from Tencent’s messaging services WeChat and QQ. The 20% stake amounts to 36.8 million Class A and B ordinary shares. Tencent also hopes the deal will expand the choice of local services and merchants available to Tencent users.

Carlos Slim consolidates America Movil ownership

Inmobiliaria Carso, the holding company of Mexican billionaire Carlos Slim, is paying $5.6 billion for AT&T’s stake in Latin American telecoms giant America Movil. The move is unlikely to appeal to the numerous voices that have been calling out the monopolistic practices of Slim in the region, as he gains stronger control over the company. However, the deal actually allows AT&T to become a competitor to America Movil in Latin America as it rids itself of a potential conflict of interests and becomes free to focus on expanding recently acquired DirecTV in the region. Penetration of digital services is rising rapidly in dynamic economies such as Mexico, Brazil and Colombia, providing opportunities for providers.

Belgian group to buy ailing UK publishing business

In another demonstration of the struggling print business, Belgian media group De Persgroep is to buy embattled UK newspaper publisher Mecom Group for $334 million. The UK firm was making heavy losses and could no longer rely on funds coming from London corporate finance. Mecom was founded in 2005 and made aggressive debt-fueled acquisitions across Europe but was caught short when the Eurozone sovereign debt crisis hit the region and print revenues spiraled downwards in the face of online competition.

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