LONDON (Reuters) - Chinese conglomerates Alibaba <BABA.N> and Tencent <0700.HK> are involved in talks to buy a minority stake in advertising giant WPP's <WPP.L> Chinese unit, Sky News reported on Saturday, citing unidentified sources.
Sky News said the firms, along with China Media Capital Holdings (CMC), were in early-stage discussions about buying roughly 20 percent of WPP China in a deal that would value the business between $2 billion and $2.5 billion.
A spokesman for WPP declined to comment.
WPP, the world's biggest advertising group, is in the midst of a leadership change.
Founder Martin Sorrell left in April following a complaint of personal misconduct. Executive Chairman Roberto Quarta said last month that the search for Sorrell's replacement was well-advanced.
The China deal, which could take several months to conclude, would see WPP pool its Chinese agency operations into a new holding company and retain majority ownership and control, Sky News said.
The report said the deal had been brewing since before Sorrell left, and that Quarta went with co-chief operating officer Andrew Scott to China this month to continue talks.
(Reporting by Alistair Smout; Editing by Edmund Blair and John Stonestreet)
