SUNING Commerce Group and Hony Capital, an affiliate of Lenovo Group, will invest US$420 million in PPTV, a Chinese online TV services provider, Suning said in a statement Monday.

    Suning will invest US$250 million to buy a 44 percent stake in PPTV and become its largest shareholder. It is believed Hony Capital will make up the remaining US$170 million although the statement did not specify that. The deal values PPTV at US$568 million.

    “It is a key step for Suning to become a fully Internetized company and is an important step in speeding up its transformation process,” Suning vice chairman Sun Weimin said via microblog service Weibo.

    Suning, which competes with Gome Electrical Appliances Holdings Ltd. backed by U.S. asset manager Bain Capital, has been forced to rethink its business model and expand into areas such as Internet services and e-commerce to chase a growing number of Internet shoppers.

    PPTV is the largest online TV service in China with more than 340 million users and offers sports, entertainment, news and other video content, according to its website.

    Online TV is gearing up to be hotly contested as Chinese Internet firms like Alibaba Group Holdings, Baidu Inc. and Xiaomi Tech have all recently expanded into the business, vying with more experienced companies like Sohu Inc. and Youku Tudou Inc.

    Hony Capital is sponsored by Legend Holdings, the parent of the Hong Kong-listed Lenovo Group, the world’s No. 1 PC manufacturer.

    According to Standard & Poor’s Capital IQ database, Hony Capital has invested in media and online TV businesses including TV advertising production firm Beijing Galloping Horse Film & TV Production Co. Ltd., media company Happigo Home Shopping Co. Ltd., and iQIYI.com Inc., an online television and movie portal operator in China of which Baidu owns a controlling share.(SD-Agencies)