TOKYO -- Chinese internet conglomerate Tencent Holdings will acquire a 6.86% stake in Japanese publishing company Kadokawa for 30 billion yen ($264 million), Kadokawa announced on Friday.

Kadokawa said in a stock exchange filing that a Hong Kong-based Tencent subsidiary called Sixjoy will buy 4.86 million shares for 6,170 yen per share, a 2.3% premium to its closing price on Friday. The transaction will take place between Nov. 15 and 26.

Tencent will become Kadokawa’s third-largest shareholder after the deal closes.

Kadokawa publishes about 5,000 book titles a year -- ranging from novels to comic books -- and also runs video-sharing site Niconico. The company said it “has decided to enter into a business alliance agreement with Tencent Group for the anime business to further promote the company’s IP-based Global Media Mix,” and “to form a capital alliance with Tencent Group."

Kadokawa will invest the entire proceeds in content by March 2024, including to secure editors and producers.

The move follows Tencent’s 65.7 billion yen investment in Rakuten in March, and signals its efforts to expand its investment portfolio in Japan as Chinese tech giants face regulatory scrutiny at home. Tencent’s stock price has dropped about 15% this year.

Tencent's investment in Rakuten raised eyebrows among some in Japan's government, which revised its foreign investment law last year to lower the minimum stake at which pre-screening is required to 1% from 10% for strategic industries. But the law has exemptions, such as portfolio investments that do not seek board representation. Kadokawa said it has confirmed with the Tencent subsidiary that the investment will qualify for an exemption.

Kadokawa did not respond to a request for comment. Tencent declined to comment.