Tencent Holdings Limited (OTC:TCEHY) and Alibaba Group Holding Limited (NYSE:BABA) are rivals in several business areas. Although the Chinese tech behemoths are now set to be collaborators, at least in the loose sense of the term.
What Happened: G7 Connect, a Chinese truck fleet management company having the backing of Tencent, is lapping up E6, a smaller rival, the South China Morning Post reported.
Alibaba reportedly owns a 10% stake in E6.
G7 Connect's proposed combination with E6, a digital solutions provider for the road-freight industry, will create a fleet management behemoth in China, the world's largest road cargo market, the report said.
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The two companies will reportedly retain their own brands and independent operations but would target synergies where there are overlaps. The merged company will retain the name G7 Connect.
Following the combination, investors, including GLP Pte, Tencent, and Alibaba-backed Cainiao Smart Logistics will each hold about a 7-10% stake, Bloomberg said, citing Jielong Zhang, CEO of G7 Connect.
G7 is planning to pursue an initial public offering in Hong Kong later this year, Bloomberg reported.
