Alibaba, the Chinese e-commerce giant will apparently pay around USD 2.23 billion for a 10% stake in the digital advertising company Focus Media. Incidentally, Focus media runs screens in elevators & subways across China, claim authentic sources.

As per reports, Alibaba is considering investing in WPP China, an ad agency, in a move that is expected to boost its e-commerce operations as well as help position itself strongly in the media & advertising sector.

The deal with Focus Media, a Shenzhen stock market listed firm, consists of a USD 1.43 billion payout for a stake of 6.6% approx. Alibaba is also expected to pay USD 505 million for a 10% stake of an entity that has control of 23% stake in Focus Media, commanded by Jason Nanchun Jiang, founder & Chairman, Focus Media. As per sources, New Retail Strategic Opportunities Fund LP, a related but non-consolidated party of Alibaba, will also buy 1.4% stake in Focus Media.

Alibaba claims that it plans to acquire 5% interest in Focus in the next 12 months. As per an official statement, this deal would bring about myriad synergies with Alibaba’s largest digital marketing platform, Alimama.

Focus plans to reach 500 Chinese cities & 500 million consumers through 5 million terminals, in the near future. As of now, Focus is present in 300 cities of China and reaches around 200 million consumers.

Alibaba’s current entertainment and media operations includes ownership of Youku, video streaming company; Alibaba Pictures, a film distribution, marketing and investment firm; and the South China Morning Post, a Hong Kong based English language newspaper.

According to recent reports, Tencent, Alibaba’s technology rival and China Media Capital (CMC), a tech investment group are in discussion to purchase stakes in WPP China, a local unit of the advertising magnate WPP. Incidentally, WPP is an investor in many of CMC’s firms, including Flagship Entertainment, BaseFX, and TVB.