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China’s antitrust watchdog to pull plug on Tencent’s videogaming mega-merger

The country’s No1 gaming and social media company wanted to bring together its top two streaming sites but regulators are poised to to halt the deal over its refusal to give up exclusive rights


A Tencent logo is seen at the World Internet Conference in Wuzhen. Photo: Reuters

The country’s No1 gaming and social media company wanted to bring together its top two streaming sites but regulators are poised to halt the deal over its refusal to give up its exclusive rights

 

Internet giant Tencent’s plans to merge the country’s top two videogame streaming sites, Huya and DouYu, is set to be blocked by China’s antitrust watchdog, sources have revealed.

The regulator is set to formally call a halt to Tencent Holdings Ltd’s plan after it’s said to have failed to address the State Administration of Market Regulation’s (SAMR) demands that it gives up its exclusive rights.

The internet giant recently withdrew the merger application for an antitrust review and refiled it after SAMR told the company it could not complete the review of the merger within 180 days since its first filing.

 

Also on AF: China’s tech crackdown widens as more US-listed companies targeted

 

Separately, Tencent’s plan to take search engine Sogou private will be approved this month by SAMR. Reuters reported in April that the regulator was ready to clear the plan.

Tencent first announced plans to merge Huya and DouYu last year in a tie-up designed to streamline its stakes in the firms, which were estimated by data firm MobTech to have an 80% slice of a market worth more than $3 billion and growing fast.

 

E-SPORTS TOURNAMENTS

Huya and DouYu are ranked No1 and No2, respectively, as China’s most popular videogame streaming sites, where users flock to watch e-sports tournaments and follow professional gamers. 

Tencent is Huya’s biggest shareholder with 36.9% and also owns over a third of DouYu, with both firms listed in the United States, and worth a combined $6 billion in market value.

 

  • Reporting by Reuters

 

Read more:

Tencent sued over blockbuster video game ‘Honor of Kings’

Tencent Music performs strongly despite antitrust probe

 

Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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