Groupon's Gaopeng to merge with Tencent-backed FTuan

Groupon (GRPN.NASDAQ) will merge its Chinese joint venture Gaopeng with Chinese deal site FTuan, a firm part-owned by mainland internet giant Tencent Holdings (0700.HKG), Bloomberg reported. The two companies will continue to operate under their individual brand names after the merger, according to a statement from Groupon and Tencent. Beijing-based FTuan offers dining and purchase deals and attracted more than US$30 million in capital from Tencent last year. Gaopeng stumbled in 2011, purportedly closing 10 offices and firing underperforming workers. The Chicago-based deal site said merging Gaopeng, in which it holds a minority stake, with FTuan is part of its plan to strengthen its investments in China. Groupon and Tencent shares rose following the announcement. China’s crowded market for group deal sites is consolidating, with number of sites shrinking to fewer than 1,000, down from 3,000 last year, according to Chinese market research firm iResearch.