District-based LivingSocial has agreed to sell its profitable South Korean daily deals business, Ticket Monster, to rival Groupon for $260 million in cash and stock, the companies announced Thursday.

The deal will fetch $100 million in cash and up to $160 million in Groupon Class A common stock for LivingSocial, though the final terms will be determined when the deal closes in the first half of next year.

That means the transaction, if approved, will make LivingSocial a shareholder of its biggest rival.

“Because it’s the stock of a public company I can’t comment on what we intend to do with it,” said John Bax, LivingSocial’s chief financial officer. “However, it is uncommon for someone to hold the stock of a competitor.”

Bax said LivingSocial sold the business unit to Groupon because the Chicago-based company simply offered the highest bid, calling the sales price a “very healthy return on cash invested.”

Ticket Monster has been LivingSocial’s most successful overseas outpost. The company was scooped up two years ago for an undisclosed sum as part of the firm’s rapid global expansion during the height of the daily deal craze.

As other foreign operations have shrunk or shuttered since then, Ticket Monster seemed to hold strong. The division employed 1,000 people, primarily in Seoul. LivingSocial declined to say how much profit Ticket Monster brought to the company.

But Ticket Monster has changed since it was first acquired. It now makes a sizeable portion of its revenue from selling consumer goods, Bax said, a line of business where Groupon has also found success in the last year.

“It shows that Groupon and LivingSocial have divergent strategies,” said Peter Krasilovsky, an analyst at BIA/Kelsey. “While they still compete for daily deals in the U.S., their other operations are not necessarily competing head to head.”

LivingSocial announced plans in September to move away from its daily deals business. Instead, the firm hopes to sell more coupons and discounts to local merchants by making them available on its Web site for longer periods of time.

Additionally, the firm has plans to sell software and services to those same merchant, helping them to streamline their sales operations, and enhance digital and social media marketing. That business is still in its infancy.

“This sale will enable us to invest more aggressively in our marketplace innovation, product development and marketing in the US and other regions in which we operate,” Chief Executive Tim O’Shaughnessy said in a statement.

“This transaction culminates after a many month process during which we received several competitive offers. This is a great deal for LivingSocial, allowing us to monetize a non-core asset and increase focus on our core platform,” O’Shaughnessy continued.

LivingSocial posted a net loss of $25 million for the third quarter of the year. Profitability continues to elude the company, even as it has pursued numerous business models in an effort to replicate the success of the daily deals that made it an initial hit.

(Amazon.com owns roughly 30 percent of LivingSocial. Amazon founder Jeff Bezos recently purchased The Washington Post and its affilitated publication.)

Staff writer Thomas Heath contributed to this report.

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