Alibaba Group and Tencent Holdings are reportedly in talks to buy a 20% stake in WPP China in a deal understood to have been first mooted by former chief executive Martin Sorrell.
Discussions are thought to be at a very early stage, according to Sky News, with WPP chairman Roberto Quarta and co-chief operating officer Andrew Scott said to have travelled to China this month for exploratory talks.
The deal would see Alibaba Group, Tencent Holdings and China Media Capital Holdings (CMC) join forces and take an equal shareholding in a new holding company.
Banking sources told Sky that Martin Sorrell had raised the prospect of a deal with Ruigang Li, one of WPP’s non-executive directors and founder of CMC.
Ruigang’s deal role, and the overall complexities of such a deal, may scupper any agreement, sources warned.
Joint ownership of a stake in WPP China would be seen as something of a surprise given the competitive tensions between Alibaba and Tencent.
