Tencent acquires stake in Snap

Chinese online streaming platform Tencent has acquired a 12 per cent stake in Snap Inc, the parent company of social media platform Snapchat.

Snap said in its quarterly report released today (Wednesday) that Tencent had bought 145.8 million shares of its non-voting Class A common stock on the open market.

The news comes after the US company yesterday (Tuesday) reported advertising revenue and user growth that were much lower than expected, resulting in its share price sliding by over 20 per cent.

The Bloomberg news agency, citing a person familiar with the deal, said Tencent’s purchase is not seen as a hostile move, with Snap chief executive and co-founder Evan Spiegel instead identifying it as an opportunity to learn from the Chinese company.

Tencent president Martin Lau said the company plans to share “ideas and experiences” with Snap, according to today’s filing.

Snap has been increasing its engagement with the sports market. International sports broadcaster Eurosport last month signed an advertising and content partnership with Snap in a move designed to engage younger audiences in next year’s winter Olympic Games in Pyeongchang, South Korea.

Snapchat users across Europe will receive access to Olympic-related content through Snap’s Discover platform as part of the agreement. Content will include behind-the-scenes action from events such as snowboarding, downhill and freestyle skiing and ice hockey, and other footage from athletes and influencers.

The deal marked the first time that Snap had committed to a European multi-language deal for covering the Olympics.

Tencent has a major presence in the Chinese sports media market. The Chinese Basketball Association last month awarded media rights to Tencent, along with fellow streaming platform Zhibo, video-sharing website Bilibili and state broadcaster CCTV.

Tencent and Zhibo sealed three-year deals covering rights to all games on a non-exclusive basis.