Chinese lifestyle service platform 58.com announced a merger with its classified information listings competitor Ganji.com.

According to the agreement, 58.com will acquire an approximately 43.2% fully diluted equity stake in Ganji.com for a combination of share consideration and cash, including approximately 34 million newly issued ordinary shares and USD412.2 million in cash. Meanwhile, the two companies will maintain independence of their respective brands, websites, and teams; and they will continue independent development and operations.

The report also revealed that Tencent will purchase USD400 million newly issued shares of 58.com at the price of USD52 per ADS. Following the completion of this additional investment by Tencent, Tencent will hold in aggregate approximately 25.1% of the total issued and outstanding shares of 58.com on a fully-diluted basis.

Yao Jinbo, chairman and CEO of 58.com, said that they are pleased to make this large-scale strategic investment in Ganji.com to jointly realize major cost, revenue, and strategic business synergies in China. This transaction is part of a larger plan to execute their vision of integrating their respective businesses and creating a larger and more effective local services Internet platform to help consumers around China find the services that they need in their local areas. Ganji.com has done a tremendous job building a talented team, Yao said, and 58.com is looking forward to working more closely with them as they continue to expand in this growing and underserved market.

Yang Yonghao, chairman and CEO of Ganji.com, said that after extensive discussions, they are pleased to reach this strategic agreement with 58.com. Both Ganji and 58.com are leading players in the online classified market and have developed unique capabilities in O2O. Personally and on behalf of Ganji, Yang says he looks forward to taking advantage of the great chemistry between Ganji and 58.com, and leveraging their respective resources and advantages.