Tencent to acquire Japanese publishing company Kadokawa

Tencent will become Japanese publishing company Kadokawa third-largest shareholder after completing the buy the stake in the company which is expected to take place in mid November. 

According to a report from Nikkei Asia, Tencent will acquire a 6.86% stake in Kadokawa for ¥30 billion (US$264 million) via its subsidiary Sixjoy. After the acquisition, the Chinese tech conglomerate will become Kadokawa's third-largest shareholder. Kadokawa said the transaction will enable it to enter into a business alliance agreement with Tencent for the anime business, further promoting the company’s intellectual property-based global media mix, adding that the transaction can also enable it to form a capital alliance with Tencent too. 

Kadokawa is a company publishing a wide variety of book titles, amounting to as many as 5,000 a year, including novels and comic books. The company also runs a video -sharing site Niconico. In Hong Kong, Kadokawa published the monthly magazine Japan Walker@HK until December 2020. Currently, it operates a website along with social media to provide Hongkoners with information and travel news about Japan. 

Tencent previously invested in Japanese electronic commerce and online retailing company Rakuten this year, which concerned the Japanese government. Last year, the Japanese government revised its foreign investment law to lower the minimum stake for pre-screening to 1% from 10% for strategic industries. 

The Nikkei Asia report said the law has exemptions, such as portfolio investments that do not seek board representation. Kadokawa confirmed that this investment qualify for exemption.

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