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China's Tencent To Back Hollywood Producer STX

The Chinese internet group Tencent Holdings is to become a shareholder in the film studio which produced The Boy and The Gift as part of a financing deal which illustrates Asia's growing influence on Hollywood.

Sky News understands that Tencent (HKSE: 0700-OL.HK - news) and PCCW (HKSE: 0008-OL.HK - news) , a Hong Kong-based media company, are among the investors in a new round of funding being raised by STX Entertainment.

Film industry sources said that details of the deal were likely to be announced this week.

If confirmed, Tencent and PCCW would join a roster of shareholders in STX (KSE: 011810.KS - news) which already includes the likes of Hony Capital, a Chinese private equity firm, and TPG Capital, a US-based peer.

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Bill McGlashan, one of the founders of TPG (Taiwan OTC: 6521.TWO - news) 's growth capital unit, was one of the figures behind the creation of STX.

The studio has produced a slate of strong performers at the box office, with its latest movie - Bad Moms, starring the actress Mila Kunis - now showing at cinemas in the US.

An as-yet-untitled comedy featuring Charlize Theron is being co-produced with Amazon Studios, underlining the changing nature of film industry production.

The STX deal will be the latest investment by Tencent, which last month acquired the Clash of Clans developer Supercell in a deal worth more than $10bn.

According to the company's website, STX "specializes in the development, production, marketing and distribution of talent-driven films, television, and digital media content, with a unique ability to maximize the impact of content across worldwide, multiplatform distribution channels, including unparalleled global capabilities and direct passage into the China market".

Chinese companies are increasingly looking beyond the company's borders for investment opportunities in the media and technology sectors.

Last month, the Chinese-owned AMC (Taiwan OTC: 3585.TWO - news) - one of the US's biggest cinema operators - agreed a deal to buy Odeon and UCI chains in the UK.

Dalian Wanda, the major shareholder in AMC, paid $3.5bn earlier this year for a controlling stake in Legendary Entertainment, which has produced films such as Godzilla and Pacific Rim.

Neither STX nor Tencent could not be reached for comment on Tuesday.