Tencent Holdings Ltd’s anticipated merger with tip videogame streaming sites DouYu International Holdings Inc. (NASDAQ: DOYU) and Huya Inc. (NYSE: HUYA) is unlikely to materialize as it faces scrutiny from Chinese antitrust regulators.
SAMRto block Tencent’s merger with DouYu and Huya
According to people familiar with the matter, Tencent came short in coming up with adequate remedies to satisfy the State Administration of Market Regulations’ conditions on surrendering exclusive rights. Recently, the tech giant withdrew the proposed merger submission for antitrust review. The company then filed the application following communication that SAMR will not finalize the merger review within 180 days since it made the first filing.
Tencent, the number one social media and video game company in china, DouYu, Huya, and SAMR, is yet to comment on the matter. Separately, SAMR will approve the company’s proposal to acquire search engine Sogou later this month. In April, Reuters reported that SAMR was about to approve the plan.
Tencent revealed plans of the merger in 2020
The tech company had announced plans to merge with DouTu and Huya in 2020 in a merger expected to streamline Tencent’s stakes in the companies. According to data company MobTech, Tencent’s stakes in the companies has an 80% market share and is worth over $3 billion and keeps growing. Currently, Huya and DouYu are the top two most popular video gaming streaming sites in China where users watch e-sports tournaments.
Tencent is the largest shareholder in Huya with 36.9% and owns around 33% of DouYu, with both companies listed in the US with a combined market value of $6 billion. According to sources, Tencent has to offer concession in a plan to merge DouYu and Huya to resolve antitrust issues.