Site icon TechiAzi

Tencent’s $5.3-Billion Huya-DouYu Merger Gets Blocked

China’s market regulator on Saturday said it would block Tencent Holdings Ltd’s plan to merge the country’s top two videogame streaming sites, Huya and DouYu, 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 percent slice of a market worth more than $3 billion and growing fast.

Tencent is Huya’s biggest shareholder with 36.9 percent 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.

Reuters first reported the State Administration of Market Regulation (SAMR) plan to block the deal on Monday, which came after the regulator reviewed additional concessions proposed by Tencent for the merger.

SAMR said Huya and DouYu’s combined market share in the video game live streaming industry would be over 70 percent and their merger would strengthen Tencent’s dominance in this market, given Tencent already has over 40 percent market share in the online games operations segment.

Huya and DouYu are ranked No. 1 and No. 2, respectively, as China’s most popular video game streaming sites, where users flock to watch e-sports tournaments and follow professional gamers.

Tencent said in a statement it “will abide by the decision, comply with all regulatory requirements, operate in accordance with applicable laws and regulations, and fulfill our social responsibilities.”

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.

Huya and DouYu did not immediately respond to requests for comment on the SAMR decision.

In a memo from SAMR published concurrently with the announcement, Zhang Chenying, a member of the state council’s anti-trust committee, argued the deal would prevent fair competition.

“If Huya and DouYu are to merge, the original joint control of Douyu will become Tencent’s complete control of a merged entity,” Zhang wrote.

“Considering factors such as revenue, active users, livestreaming resources and other key indices, we can expect that a merger would eliminate or restrict fair competition.”

© Thomson Reuters 2021


Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Gaming News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – abuse@techiazi.com. The content will be deleted within 24 hours.
Exit mobile version