The pullout comes just two two days after China’s market regulator blocked Tencent’s proposal to bring together under one roof the country’s top two videogaming sites
DouYu International Holdings Ltd confirmed on Monday that it had terminated its $5.3 billion deal with Huya Inc – two days after China’s market regulator blocked Tencent Holding Ltd’s plans to merge the country’s top two videogame streaming sites.
China’s State Administration of Market Regulation (SAMR) announced on Saturday that it would block the deal on antitrust grounds.
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% share in a market worth more than $3 billion.
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Tencent is Huya’s biggest shareholder with a 36.9% stake and also owns over a third of DouYu, with both firms listed in the United States, and worth a combined $5.3 billion in market value.
US-listed shares of DouYu were down 2% pre-market, while those of Huya were down 1%.
The deal termination comes amid an ongoing crackdown on Chinese tech companies from the government. Earlier this year, the anti-monopoly regulator placed a record $2.75 billion fine on e-commerce giant Alibaba for engaging in anti-competitive behaviour.
- Reporting by Reuters
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