Earnings

Naspers Sells 2% Stake In Tencent For More Than $10B Windfall

Alibaba and Tencent

Naspers, the South African media and internet company, is unloading 2 percent of its stake in China’s Tencent, giving it up to $11 billion in return.

In a press release, Naspers said it will sell up to 190 million shares of Tencent, the Chinese company behind the popular WeChat messaging app, reducing its stake to 31.2 percent from 33.2 percent. Naspers said it will use the proceeds from selling the shares to add to its balance sheet and leverage growth opportunities in its global classifieds, online food delivery and FinTech businesses.

Naspers originally launched in 1915 as a newspaper publisher. Its value has soared in large part because of its stake in Tencent. According to a report in The Wall Street Journal, it owns stakes in German food delivery company Delivery Hero as well as Flipkart, the leading eCommerce player in India.

This is the first time Naspers has sold any of its holdings in Tencent, which it has held since 2001, when it spent $34 million on the shares. Naspers told WSJ that it doesn’t plan on selling any more of its Tencent shares for at least three years, and that Tencent supports the stock sale.

As late as August, Naspers was dismissing calls to sell its stake in Tencent and break up the eCommerce and Pay TV company. According to a report in Reuters at the time, chairman Koos Bekker said: “We started getting that advice from the day Tencent listed in 2004. Fact is, each time our board evaluated Tencent, we concluded at that moment it’s still the best use for our money. And today, we see no reason yet to change.”

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