MUMBAI: Chinese multinational e-commerce company Alibaba, Tencent Holdings and China Media Capital Holdings (CMC) are in talks to buy a 20 per cent stake in advertising giant WPP’s Chinese unit.

With this, Alibaba, Tencent and CMC would hold equal shareholding (6.66 per cent each) in the company.

The deal is said to value the business between $2-2.5 billion. The deal was first initiated  by WPP former chief executive Sir Martin Sorrell but after his exit, Roberto Quarta went to China this month with co-chief operating officer Andrew Scott to continue talks.

WPP is already in the midst of a leadership change with Sorrell’s exit while executive chairman Roberto Quarta said last month that the search for his replacement was well-advanced.

The deal that may take several months to conclude, would see WPP pool its Chinese agency operations into a new holding company and retain majority ownership and control, said a report by Sky News.

However, the joint ownership in WPP China could come as a surprise given the competitive tension between Alibaba and Tencent. 

Additionally, Alibaba has also agreed to pay $2.23 billion for a roughly 10 per cent stake in digital advertising company Focus Media that  operates screens in elevators and subways in China. Alibaba is aggressively looking at expansion in advertising and media sectors.