(Bloomberg) -- Tencent Holdings Ltd. plans to distribute nearly its entire stake in JD.com Inc. to its investors as dividend, retreating from the Chinese e-commerce firm that has been one of its most successful investments.
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It plans to give out 457.3 million Class A shares in JD.com, representing about 86.4% of its total stake and nearly 15% of the online retailer’s total issued shares, according to a filing to the Hong Kong stock exchange. Tencent President Martin Lau will resign as director of JD.com as of Dec. 23.
Tencent, which controls about 17% of JD.com, will hold roughly 2.3% of the e-commerce company’s shares after the handout, JD.com said in a separate statement. At Wednesday’s close, the shares would be worth more than $16 billion.
Tencent’s strategy is to invest in companies during their development stage and to exit the investments as the investees become capable of self-financing their future initiatives, the internet giant said. “The Board believes that JD.com has now reached such a status, and the Board therefore considers that it is an appropriate time to transfer” the majority of the shares to its investors, the company said.
The two firms will continue to maintain their “mutually beneficial business relationship, including via their ongoing strategic partnership,” Tencent said.
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