(Yicai Global) March 12 -- Tencent Holdings plans to pay JPY65.7 billion (USD602 million) to become the sixth-largest shareholder of Japanese e-commerce pioneer Rakuten Group.

Rakuten will allot 57.4 million shares to the Chinese tech giant’s wholly owned unit Image Frame Investment Hong Kong at JPY1,145 (USD10.50) each, giving it a 3.65 percent stake, Shenzhen-based Tencent said in a statement today. The pair had been in talks since the start of the year.

That was a discount of 0.1 percent to Rakuten’s closing price yesterday, but was 8.4 percent above its average JPY1,056 over the last three months.

Tokyo-based Rakuten has also allotted over 131 million shares to Japan Post Holdings and 14.5 million to Walmart as part of a plan to raise JPY242 billion (USD2.22 billion).

Rakuten determined that strengthening ties with Tencent, with the aim of enhancing services through collaboration, has the potential to contribute to the group’s competitiveness and momentum. The potential areas for collaboration include digital entertainment and e-commerce, the statement added.

“Rakuten has built a vibrant ecosystem through its membership and loyalty program, extending its unrivalled strength from e-commerce to fintech and digital content,” said Liu Zhiping, executive director and president of Tencent.

“Tencent shares Rakuten’s aspiration of creating value through innovation and empowerment for users and partners,” Liu said.

Founded in 1997, Rakuten had a net loss of JPY1.1 billion (USD10 million) last year and JPY319 million (USD2.9 million) the year before.

Editor: Peter Thomas