China's Tencent Holdings (OTC: TCEHY) announced Tuesday that it has signed a definitive agreement to acquire the entirety of compatriot search engine operator Sogou (NYSE: SOGO) . Tencent, which already has a substantial stake in Sogou, will then take the company private. Sogou will become a subsidiary of its new owner and no longer trade on the stock exchange.
The deal does not come as a surprise. Tencent originally announced its offer in July.
All told, Tencent is paying $1.18 billion in the deal, which breaks down to $9 per share. Its main counterparty is another Chinese company, internet conglomerate Sohu.com (NASDAQ: SOHU) -- which, in a fairly tangled web of shareholdings, is currently the umbrella company that owns Sogou. The deal is expected to close in the fourth quarter of this year.
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Tencent Holdings Is Acquiring Sogou and Taking It Private