China’s Xiaomi is to buy 3% stake in Kingsoft from Tencent Holdings. According to a Kingsoft filing on Monday, Xiaomi will buy 35.3 million shares of Kingsoft at 14.93 Hong Kong dollars (US$1.93) per share, for a total of HK$527 million (US$68 million).
This investment comes after becoming the world’s most valuable startup with a valuation of more than $46 billion and also being last year world’s third largest smartphone company by sales.
Kingsoft, currently valued at over $2 billion is into the production of security, entertainment and enterprise products as well as PC game development that it started out with. Xiaomi’s founder and CEO, Lei Jun is also Kingsoft’s chairman and was previously the CEO of the software maker.
According to WSJ, Xiaomi is looking to expand in content and software, announcing in November that it would put $1 billion toward the acquisition of video content.
The Xiaomi investment in Kingsoft is expected to be completed at the end of January 2015. In a public statement, Kingsoft stated that the acquisition reflects Xiaomi’s strong confidence in the company, and that Tencent will remain an important business partner.
