Beijing takes the joy out of China tech M&A

JOYY

27/09/2021 09:19

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    HONG KONG, Sept 27 (Reuters Breakingviews) - What is the fun
in being a Big Tech boss if you can't swallow smaller peers?
Baidu's  BIDU.O   9888.HK  Robin Li, who runs the $55 billion
search-engine operator, is facing resistance  urn:newsml:reuters.com:*:nL8N2QJ255 from
anti-trust authorities over the $3.6 billion purchase of a local
video app from streaming specialist Joyy. If derailed, it would
be the second major deal flop since Tencent's  0700.HK 
unsuccessful merger  urn:newsml:reuters.com:*:nL1N2OO012 of two e-sports companies in
July.
    Regulators may stall the approval process rather than try to
find a legal block: Neither Joyy's domestic short video-app nor
Baidu's own offering has made a dent against TikTok-owner
ByteDance or Kuaishou  1024.HK , so there's little monopolistic
 urn:newsml:reuters.com:*:nL4N2I50GU threat. It's more likely that Beijing is sending a
fresh signal to web giants that it doesn't want them to get any
bigger. 
    A handful of other deals, including JD.com’s  JD.O 
 9618.HK  investment in an electronics-components trading
business, are under scrutiny too. It wouldn’t be so bad if
executives knew they could build size organically but it’s
unclear if China’s regulators are opposed to size or just the
manner in which it is attained. (By Robyn Mak) 
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 (Editing by Una Galani and Katrina Hamlin)
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