By Sherry Qin
Tencent Music Entertainment said it plans to acquire podcast startup Ximalaya, with ambitions of becoming China's Spotify.
Tencent Music, a unit of Chinese tech giant Tencent Holdings, plans to acquire Ximalaya in a cash-and-stock deal, it said in a Hong Kong exchange filing Tuesday.
The company will pay Ximalaya shareholders $1.26 billion in cash and issue ordinary shares.
Ximalaya will undertake a restructuring of certain existing businesses, Tencent Music added.
Tencent Music's U.S.-listed stock was up 6.7% in Tuesday premarket trading after disclosing the deal.
Tencent Music is one of the biggest online music entertainment platforms in China, with apps such as QQ Music and Kugou. It was created in mid-2016 after Tencent bought a controlling stake in China Music Corp. and combined it with Tencent's existing streaming business. The company listed on the New York Stock Exchange in late 2018.
The company had 555 million monthly average users as of the first quarter, down 4% from a year earlier.
Ximalaya, founded in 2012, is a popular audio platform in China that provides a range of audio content, including podcasts and audiobooks.
Access to streaming giant Spotify's services is blocked in China.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
06-10-25 0715ET
