Tencent e-sports defeat exposes tech M&A weakness

DouYu International Holdings

12/07/2021 04:34

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Robyn Mak
    HONG KONG, July 12 (Reuters Breakingviews) - Trustbusters
nixed a $5 bln merger of two video-game streaming companies the
Chinese titan backs. It's a sign Beijing will no longer tolerate
the kinds of transactions that created giants like Meituan. For
Tencent boss Pony Ma, a bigger problem may be having to unwind
past deals.
    Full view will be published shortly.
    Follow @mak_robyn https://twitter.com/mak_robyn on Twitter 
    
    CONTEXT NEWS
    - China's State Administration for Market Regulation on July
10 said it would block Tencent's plan to merge two video-game
streaming companies on antitrust grounds.
    - Huya and DouYu, both listed in New York, agreed to merge
in October 2020. As of March 2021, Tencent was Huya's biggest
shareholder with a 47.4% economic stake and also owned 37.2% of
DouYu. The two companies had a combined market capitalisation of
$5.3 billion as of July 9.
    - SAMR said Huya and DouYu's combined market share in the
video-game live-streaming industry would be over 70% and their
merger would strengthen Tencent's dominance in this market,
given that Tencent already has over 40% market share in online
games.
    - 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".
    - For previous columns by the author, Reuters customers can
click on  MAK/   
 

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Chinese antitrust regulator blocks Tencent's $5.3 bln video
games merger     urn:newsml:reuters.com:*:nL2N2OM019
SAMR statement - Chinese    http://www.samr.gov.cn/xw/zj/202107/t20210710_332525.html
BREAKINGVIEWS - Spanner in Tencent's M&A machine could be useful
    urn:newsml:reuters.com:*:nL4N2IX09Z
BREAKINGVIEWS - Player 2 wins out in Chinese e-sports deal   
 urn:newsml:reuters.com:*:nL4N2H409S
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Jeffrey Goldfarb and Katrina Hamlin)
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