JD.Com, Tencent Extend Tie-Up for Three More Years With USD220 Million Stock Deal
Lu Hanzhi
DATE:  Jun 30 2022
/ SOURCE:  Yicai
JD.Com, Tencent Extend Tie-Up for Three More Years With USD220 Million Stock Deal JD.Com, Tencent Extend Tie-Up for Three More Years With USD220 Million Stock Deal

(Yicai Global) June 30 -- JD.Com, China's second-biggest e-commerce operator, has extended its partnership with Tencent Holdings for three more years, and will issue USD220 million shares to the tech giant over the period.

Under the renewed agreement, Tencent will continue to provide JD with level-one and level-two access points on its WeChat platform and internet traffic support, the Beijing-based online retailer said in a statement yesterday.

The partnership began in 2014 with a five-year deal that was extended for three years in 2019. Its renewal will allay concerns about Tencent’s commitment to JD after the Shenzhen-based firm said  last December that it would hand about 460 million JD shares worth HKD127.7 billion (USD16.3 billion) to its investors as a dividend, slashing its stake to 2.3 percent from 17 percent.

JD.Com relies heavily on Tencent's access points and needs its support to maintain user growth, Pan Helin, co-chair of Zhejiang University International Business School's research center for the digital economy and financial innovation, told Yicai Global.

For Tencent, the tie-up boosts business as external user traffic is no longer monopolistic with China’s internet platforms linking up, Pan added.

The pair will also cooperate in fields such as artificial intelligence, information security, communications, technology services, marketing and advertising, and membership services, JD.Com said in its statement.

Shares of JD.Com [HKG: 9618] rose 0.8 percent today to close at HKD253.40 (USD32.30). Its New York-listed stock [NASDAQ: JD] finished 0.5 percent higher yesterday at USD64.85. Tencent [HKG: 0700] fell 2.4 percent to HKD356.40 today.

Editors: Xu Wei, Futura Costaglione

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Keywords:   JD.Com,Cooperation