Tencent Holdings Ltd , the dominant social networking and online entertainment company in China, has agreed to buy 14.6 percent of mobile game developer Glu Mobile Inc for $126 million to expand in the U.S. gaming market.

Shares of Glu Mobile, which developed Deer Hunter and Kim Kardashian: Hollywood games, rose about 24 percent in extended trading.

Tencent, known for investing in game developers through partnerships and minority stakes, owns League of Legends developer Riot Games and has a stake in Activision Blizzard Inc, the owner of the Call of Duty franchise.

Glu Mobile reported a better-than-expected profit for the eighth straight quarter, helped by strong demand for games such as Racing Rivals, Deer Hunter 2014 and Contract Killer: Sniper.

The company plans to launch a mobile game with pop star Britney Spears in the first half of 2016.

Tencent has been aggressively taking on Chinese giants such as Alibaba Group Holding Ltd and Xiaomi Inc in the technology industry.

Tencent launched an operating system for internet-connected devices such as TVs and watches that is open to all developers.

The Chinese company will pay $6 per share for its stake in Glu Mobile.

Tencent will buy the shares in two tranches: 12.5 million shares followed by a further 8.5 million some time in the second quarter.

Cowen and Co LLC provided a fairness opinion to Glu Mobile's board in connection with the deal.