Qihoo 360 Technology is forking out US$409.05 million for a new joint venture with Chinese smartphone maker, Coolpad, to produce mobile devices for the local market.
Qihoo will own a 45 percent stake in the new entity, which will focus on building handsets to be distributed primarily online, the internet company said in a statement.
"The joint venture will leverage Coolpad's extensive experience in smartphone design, manufacturing, supply chain management, and after-market services, while benefiting from Qihoo 360's strong capability in mobile app development and online marketing," it added.
Smartphones manufactured under the joint venture will be sold under Coolpad's existing Dazen brand. The Chinese smartphone maker is China's third-largest by market share and sold 3 million units online in the first half of 2014, which contributed 13 percent of its overall volume.
Under the new agreement, Qihoo 360 will be the primary provider of key mobile services for Coolpad's smartphones, including security, app store, and search.
Coolpad Chairman and CEO Guo Deying said: "The partnership with Qihoo 360 will be an important step for Coolpad to construct a strong mobile internet ecosystem."
Qihoo 360, which also sells security products, in June inked a partnership with Microsoft to co-develop mobile internet and artificial intelligence technologies.