Tencent concedes to giant videogaming merger

Tencent

Sources say that Chinese internet giant, Tencent Holdings Ltd, is having to offer concessions in a plan to merge the country’s top two videogame live-streaming sites in order to resolve antitrust concerns.

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

But with regulators concerned the deal would give Tencent overwhelming dominance, it is willing to settle for approval subject to conditions.

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

The change comes amid China’s sweeping anti-monopoly crackdown on it’s internet giants. The crackdown started with 2020’s shelving of financial technology firm Ant Group’s $37 billion initial public offering, and has expanded across the sector.

Sources also say that the antitrust review of the merger had been an “elongated process”, but nothing concrete had been communicated from the regulator to the companies regarding potential concessions.

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 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 $10 billion by market value.

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