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Topics include: Direct to consumer / E-commerce / Data & privacy / Martech

Alibaba, Tencent and CMC in talks to buy stake in WPP's China operations

WPP is reportedly in talks to sell a stake in its China operations / WPP

Alibaba, Tencent and China Media Capital Holdings (CMC) are reportedly in discussions to purchase a $2.5bn stake in WPP China.

The deal would see the Chinese companies take ownership of around 20% of the WPP’s Chinese operations, according to Sky News.

While discussions are still in the early stages, reports suggest the stake would be spun off to create a new holding company, with WPP retaining majority ownership and control, while Alibaba, Tencent and CMC would all hold equal shareholdings.

The news follows a trip to the China market this month by WPP chairman Roberto Quarta and co-chief operating officer Andrew Scott. Reports suggest the talks were initially tabled by former WPP chief executive officer Martin Sorrell and WPP non-executive director Ruigang Li, who is the founder of CMC.

Both Alibaba and Tencent have been working to boost their advertising and marketing expertise, with both tech giants looking to recruit talent to create inhouse advertising agencies. Both tech giants already work in partnership with WPP, with GroupM signing a strategic partnership with Alibaba last year, while a social media partnership with Tencent was inked in 2016.

Earlier this year, Sorrell told The Drum, that WPP had a “modus vivendi” with the Chinese tech giants.

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