HONG KONG • Social networking giant Tencent Holdings has agreed to acquire a controlling stake in China's leading music-streaming company China Music Corp (CMC), a union that will create a dominant player in the Asian country's online-music market.

Tencent, which also runs its own music-streaming service, will boost its stake in CMC to about 60 per cent from 16 per cent, sources told The Wall Street Journal (WSJ). The deal values CMC at roughly US$2.7 billion (S$3.6 billion).

Tencent operates QQ Music, while CMC owns Kugou and Kuwo.

The deal would bring together the country's top three mobile music applications with a combined market share of 56 per cent.

According to iiMedia Research, China's mobile-music services had 450 million users as of the first quarter of this year, making it the world's largest market by the number of users.

CMC had been planning an initial public offering in the United States before agreeing to be bought by Tencent. That plan has now been put on hold, WSJ reported.

Tencent is also in talks with lenders for a loan of about US$3.5 billion to back its purchase of a majority stake in Supercell Oy from SoftBank Group Corp, sources told Bloomberg.

Asia's biggest Internet company is discussing the non-recourse financing with its relationship banks, and the loan size may change, according to the person, who was not authorised to speak publicly and asked not to be identified.

Tencent is leading a US$8.6 billion deal for control of Supercell, the Finnish maker of mobile games, including Hay Day, Clash Royale and Boom Beach.

China's Internet giants have been tapping demand for "new economy" investments and raising more funds in debt markets, with the nation's biggest e-commerce company Alibaba Group Holding getting a US$4 billion loan earlier this year.

Tencent spokesman Canny Lo did not respond to an e-mail seeking comment and phone calls went unanswered, said Bloomberg.