A Tencent brand is seen at its sales space on the 2020 China Worldwide Honest for Commerce in Companies (CIFTIS) in Beijing, China September 4, 2020. REUTERS/Tingshu Wang
HONG KONG, July 10 (Reuters) – China’s market regulator on Saturday stated it will block Tencent Holdings Ltd’s (0700.HK) plan to merge the nation’s high two videogame streaming websites, Huya (HUYA.N) and DouYu , on antitrust grounds.
Tencent first introduced plans to merge Huya and DouYu final 12 months in a tie-up designed to streamline its stakes within the corporations, which had been estimated by knowledge agency MobTech to have an 80% slice of a market price greater than $3 billion and rising quick.
Tencent is Huya’s largest shareholder with 36.9% and likewise owns over a 3rd of DouYu, with each corporations listed in america, and price a mixed $5.3 billion in market worth.
Reuters first reported the State Administration of Market Regulation (SAMR) plan to dam the deal on Monday, which got here after the regulator reviewed extra concessions proposed by Tencent for the merger. read more
SAMR stated Huya and DouYu’s mixed market share within the online game dwell streaming business can be over 70% and their merger would strengthen Tencent’s dominance on this market, given Tencent already has over 40% market share within the on-line video games operations phase.
Huya and DouYu are ranked No. 1 and No. 2, respectively, as China’s hottest online game streaming websites, the place customers flock to observe e-sports tournaments and observe skilled players.
Tencent stated in an announcement it “will abide by the choice, adjust to all regulatory necessities, function in accordance with relevant legal guidelines and laws, and fulfill our social obligations.”
The deal termination comes amid an ongoing crackdown on Chinese language tech firms from the federal government. Earlier this 12 months, the anti-monopoly regulator positioned a document $2.75 billion superb on e-commerce big Alibaba for participating in anti-competitive behaviour.
Huya and DouYu didn’t instantly reply to requests for touch upon the SAMR choice.
In a memo from SAMR revealed concurrently with the announcement, Zhang Chenying, a member of the state council’s anti-trust committee, argued the deal would forestall honest competitors.
“If Huya and DouYu are to merge, the unique joint management of Douyu will change into Tencent’s full management of a merged entity,” Zhang wrote.
“Contemplating elements resembling income, energetic customers, livestreaming assets and different key indices, we will count on {that a} merger would get rid of or limit honest competitors.”
Reporting by Kane Wu in Hong Kong, Josh Horwitz in Shanghai and Cheng Leng in Beijing; Modifying by Lincoln Feast.
Our Requirements: The Thomson Reuters Trust Principles.
