China Literature Limited (Yuewen in Chinese) acquired Tencent Animation and Comics for 600 million yuan ($84 million) on Monday, 11 December 2023. It has been described as a strategic move for China Literature to strengthen its position in the digital content industry.
The acquisition covers all related business, film projects, animation, IP rights, and the Tencent Animation and Comics App. Moreover, Tencent already holds 56% of shares in China Literature, effectively making the acquisition a merger of subsidiaries.
Despite Tencent’s recent losses totaling $41 million, China Literature aims to boost its novel-to-animation adaptations and improve its IP ecosystem. The acquisition is also expected to drive future growth, leveraging AI in production. Moreover, the news has already bumped its stock with a 13% surge in the Hong Kong market.
Tencent Animation and Comics was launched in 2012 and is famous for launching popular titles, including The Fox Spirit Matchmaker, The Outcast, and Spare Me, Great Lord. The Outcast alone has generated more than six billion views on the platform.
Hou Xiaonan, CEO of China Literature, said, “China Literature and Tencent Animation and Comics share a rich history of collaboration which has yielded remarkable accomplishments. It is worth noting that approximately 50% of Tencent Animation and Comics’ top 30 best-selling titles originate from China Literature’s IPs.”
“We expect this alliance to become a key driver of China Literature’s future growth, and through robust synergies, we believe the combined entity will create more value than either party could achieve individually,” Hou said.
Moreover, Xianon stated in a recent interview at the Frankfurt Book Fair that the company was looking for growth opportunities by being more aggressive. “As with Joy of Life, when a story becomes popular as a movie or animation series, it brings consumers to the [China Literature] platform, because people who watch the series may have never read the original stories,” Xiaonan said.
China Literature has had a good track record of successfully adapting its literary content into various formats. Hence, the acquisition could increase its reach and revenue streams. In 2022, a report said the industry raked in 4.06 billion yuan in overseas sales, representing a nearly 40 percent year-on-year jump.
Navkiran Dhaliwal is a seasoned content writer with 10+ years of experience. When she's not writing, she can be found cooking up a storm or spending time with her dog, Rain.