Tencent to Acquire 11 Percent Stake in Mapping Company NavInfo for $187 Million

Tencent Holdings Ltd., Asia’s largest internet company by market value, will purchase an 11.3 percent share of mapping company NavInfo Co. from China Siwei Surveying & Mapping Technology Corp. for $187 million, according to a filing with the Shenzhen Stock Exchange. If approved by regulators, the acquisition will make Tencent NavInfo’s second largest shareholder after Siwei.

NavInfo, China’s largest digital map provider, provides the maps that are used by navigation systems in BMW, Ford, Toyota, Nissan, Volkwagens, and other vehicles sold in China. NavInfo also provides the back-end data for maps run by Baidu Inc.

By purchasing a stake in NavInfo, Tencent could use NavInfo’s mapping services to send location-based advertisements to WeChat users and power Tencent’s mapping apps, streetview products, and a new navigation device for drivers, Lubao Box.

News of the Tencent-NavInfo deal comes just three weeks after rival Alibaba Group Holding Ltd. acquired the remaining 72 percent of AutoNavi Holdings Ltd. that it did not already own for $1.5 billion. AutoNavi currently holds a 31 percent share of China’s mobile map app market along with a rare mapping license from the Chinese government.

Competition between Alibaba and Tencent over China’s 618 million Internet users has heated up over the past year. Tencent and Alibaba spent $3.1 billion and $3.5 billion, respectively, on investments in 2013. To challenge Alibaba in the ecommerce market, Tencent purchased a 15 percent stake in online retailer JD.com on March 9.  Alibaba responded by investing $280 million in mobile messaging app-maker Tango to challenge Tencent’s popular WeChat app.

(Photo by Fredrik Rubensson via Flickr)