Demonstrating the strength of Chinese mobile game M&A activity, Talkweb (SZ:002261), has announced a $130 million deal to increase its 10 percent stake in developer Huorong Game (HRG Tech) to complete control.

The purchase will be made with $52 million in cash, of which $43 million will be raised in a rights issue, and the remainder paid in newly issued shares.

"This is our first step in our three year plan to become a leading company in mobile games," said Talkweb's CEO Li Xinyu.

Laying down trumps

Huorong Game's best known release is 3D online multiplayer card game Papa Three Kingdoms.

It's been downloaded 3.8 million times since its launch in March, and is currently generating almost $8 million (RMB 50 million) a month in revenue.

And it's not just been successful in China, with 29 percent of revenues coming from the likes of Taiwan, Hong Kong, Macao and South Korea.