Tencent invests in South Korea's YG Entertainment

China's internet giant Tencent Holdings Ltd is investing in YG Entertainment to better tap South Korean stars' influence on Chinese fans.

YG Entertainment, which owns several famous k-pop bands, including Big Bang, announced on Friday that the company will raise a total investment of $85 million from Tencent and a Chinese online ticketing firm Weiying Technology.

The deal will be officially inked in Seoul on May 31st, said a statement released by Tencent. The three companies will jointly announce their strategic investment and plans for future growth in China based on collaborative efforts.

Weiying Technology and Tencent will respectively invest $55 million and $30 million and hold 8.2 percent and 4.5 percent in YG, becoming the third and fourth largest shareholders of YG after L Capital Asia, the investment arm of LVMH Group, said the statement.

YG Entertainment said the company has seen growth of more than 30 percent every year for the past ten years and in order to maintain such strong growth, it must expand its business to the Chinese market.

YG also said it will establish a joint venture in China with Tencent and Weiying Technology to expand the activities of YG artists, actors and actresses and discover and nurture local Chinese artists.

Tencent said it looks forward to working with YG to meet the huge appetite in China for popular Korean entertainment such as music, concerts and variety shows, and to explore new business opportunities.

Weiying Technology operates the mobile ticketing application called Wepiao, which runs on Tencent's platforms including QQ and Weixin. The company sells tickets for movies, shows and sporting events online and has over 20 million active users.