Tencent, one of China’s biggest Internet companies, has agreed to purchase a 14.6 percent stake in Glu Mobile, the San Francisco game developer probably best known for the hit app Kim Kardashian: Hollywood. Shares of Glu rocketed 23 percent in after-hours trading as investors showed their approval for the deal, as well as its strong first-quarter earnings report.
In a statement, chairman and CEO Niccolo de Masi said the deal is meant to help Glu expand its business in China.
Tencent will pay $126 million for 21 million shares of Glu at $6 each.
Not only is Tencent China’s largest gaming company, but it is also the top publicly traded company in the world by game revenue according to research firm Newzoo, making $7.2 billion in 2014 (Sony and Microsoft came in second, with $6.04 billion and $5.02 billion in revenue, respectively).
Its other investments in U.S. gaming companies include a majority stake in League of Legends developer Riot Games, Activision Blizzard and Epic Games.
One of the keys to the growth of Tencent’s gaming business is its relatively early shift to mobile, which Tencent Games’ vice president Bo Wang said the company made more than two years ago after observing trends in South Korea, another market it focuses on for investments.
In addition to Kim Kardashian: Hollywood, Glu’s hits include Deer Hunter and Diner Dash. It just signed a five-year deal with Britney Spears to make another celebrity game.