Tencent Holdings Ltd said on Friday that it will merge its QQ music service with China Music Corp, a move combining some of the country's most popular streaming music platforms to build a giant in the digital music market.

The merger will give the Shenzhen-based internet giant the majority stake in the newly formed entity, which is looking at an initial public offering in the future, according to a Tencent statement.

Under the agreement, the new company will run services including Tencent's flagship QQ music and CMC's Kugou and Kuwo, all of which "will continue to manage their existing brands and operations independently".