The National Basketball Association expanded its agreement with Internet company Tencent Holdings Ltd to increase the league's presence in the world's most populous country.

The deal is valued at about $700 million, according to a person with direct knowledge of the matter. The five-year agreement, which takes effect on July 1, creates the largest international digital partnership for the NBA, the first United States sports league to open a business office in China and the first to play in the nation.

The extension also makes Tencent, which market research firm Millward Brown called the "most valuable Chinese brand" the exclusive digital partner of the NBA in the country of 1.35 billion people. That gives Tencent popular programming that will draw advertisements and boost revenue, said Ashley Sheng, a Shanghai-based analyst at SWS Research Co.

"Content has been increasingly important for Internet companies ... especially Tencent," Sheng said. "We believe Tencent's next growth driver is online ads from both PC and mobile."

The pact follows Tencent's December agreement to distribute Sony Music Entertainment songs from artists including Beyonce Knowles. Last year, it also reached distribution deals with Warner Music Group Corp, Fox International Channels, YG Entertainment Inc and HBO.

"NBA fans in China are among the most passionate and knowledgeable basketball fans in the world," NBA Commissioner Adam Silver said in a statement.

Hundreds of millions of people communicate on Tencent platforms. The Shenzhen-based company was the largest Internet company in Asia by market value until Alibaba Group Holding Ltd's $25 billion initial public offering in September.