China’s Tencent giant faces concessions to win green light for merger

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Chinese Internet giant Tencent Holdings Ltd is being offered a concession in its plan to merge the country’s top two videogame live-streaming sites to address antitrust concerns, two people familiar with the matter told Reuters .

Tencent, China’s No. 1 videogame and social media firm, announced plans to merge Huya and DouYu for the first time last year, designed to streamline its stake in firms, speculated by data firm MobTech Gone that 80% of the market is already worth slicing. More than $ 3 billion and growing rapidly.

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But according to regulators the deal would be heavily dominated by Tencent, it is willing to compromise to approve the terms, according to people, who had to be named because of the sensitivity of the case.

China’s State Administration of Market Regulation (SAMR) said it was reviewing the merger in December.

Tencent, Huya, DouYu and SAMR did not immediately respond to Reuters’ requests for comment.

The agreement between Beijing’s widespread anti-monopoly over China’s Internet giants has changed. The rift began in 2020 with the shelving of the $ 37 billion initial public offering of financial technology firm Ant Group, and has expanded across the region, before reducing share prices and targeting some pre- Moved to take empty measures.

A separate person with direct knowledge of the deal said the antitrust review of the merger was a “lengthy process”, but nothing concrete was given to companies from the regulator about possible concessions.

Huya and DouYu ranked No. 1 and No. 2 as China’s most popular video game streaming sites, respectively, where users flock to watch e-sports tournaments and follow professional gamers. Tencent is the largest shareholder of Huya with 36.9% and with both firms listed in the United States, and with a combined value of $ 10 billion by market value, DUYu owns more than a third.

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“Tencent continues to dominate game publishing in China, while the two live-streaming sites combined will be the trendmount for further growth in the business,” said Reuters, one of the people familiar with the case.

Announcing the Hui-DU plan in October last year, Tencent said it aims to turn its wholly-owned videogame live-streaming business into a merger under its Penguin arm and into DU’s combined businesses.

However, it has given rise to concerns, with people familiar with the matter. Tencent requires a user-agreement that the company-owned game cannot be live-streamed on other platforms without its approval.

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Chinese tech giants were using this requirement to block competitors, such as ByteDance, which has forged a path in the gaming scene, from using content for which Tencent owns intellectual property.