Baker & McKenzie is advising THL A21 Limited, a wholly-owned subsidiary of Tencent Holdings Limited (“Tencent”), China’s biggest internet group, as transaction counsel on its acquisition of a 36.5 per cent stake in Sogou Inc. (“Sogou”), one of the leading search and internet services provider in China. Sogou’s parent, Nasdaq-listed Sohu.com Inc., (“Sohu”) will remain the controlling shareholder and Sogou will continue to be an independent subsidiary. President Martin Lau and Tencent’s Chief Operating Officer Mark Ren, will join Sogou’s Board of Directors.
As part of the transaction, Tencent has merged its Soso search-related businesses and certain other assets with Sogou. Tencent and Sogou have also agreed to jointly develop, cross-promote and integrate their respective products and services, while collaborating in areas of search technology, user insights and data sharing. Sogou’s leading products, including Sogou Pinyin and Sogou Search, will have direct access to the vast user base of Tencent’s online and mobile social communities. Tencent’s other products include popular messaging services QQ, Weixin and WeChat; Qzone for social networking; the QQ online gaming platform; and an e-commerce platform.
Goldman Sachs acted as financial advisor to Tencent and Credit Suisse acted as financial advisor to Sohu.
The Baker & McKenzie team advising Tencent is led by Shanghai-based corporate partner Howard Wu and special counsel Zhenyu Ruan, with support from associate Tracy Zhang. The team acted as transaction counsel with primary responsibility for preparing and negotiating the business cooperation-related transaction agreements, advising on related legal issues and general transaction management.
Commenting on the deal, Howard said, “We are delighted to act as transaction counsel to Tencent on its strategic acquisition and cooperation with Sogou.”
Zhenyu Ruan added, “This transaction will further consolidate Tencent’s market presence and will also assist in diversifying its existing platform as well as in creating innovative products for its users.”
