Chinese antitrust regulator blocks Tencent’s $5.3 billion video game merger with Reuters

HONG KONG (Reuters)-The Chinese market regulator said on Saturday that it would block Tencent Holdings (OTC:) Ltd’s plan to merge China’s two major video game streaming sites Huya (NYSE:) and Douyu on antitrust grounds.

Tencent first announced a plan to merge Huya and Douyu last year, aiming to streamline its shares in these two companies. According to data company MobTech, these two companies account for 80% of a rapidly growing market valued at more than $3 billion. Share.

Tencent is Huya’s largest shareholder, holding 36.9% of the shares, and also owns more than one-third of Douyu’s shares. Both companies are listed in the United States, with a combined market value of US$5.3 billion.

The State Administration for Market Regulation (SAMR) stated that the decision was made after reviewing additional concessions made by Tencent for the merger.

According to the announcement of the State Administration for Market Regulation, Tencent applied for antitrust review of the merger in January.

According to the State Administration of Market Supervision, Huya and Douyu’s total market share in the video game live broadcast industry will exceed 70%. Given that Tencent already has more than 40% market share in the field of online game operations, their merger will strengthen Tencent’s dominance in this market. status.

As China’s most popular video game streaming sites, Huya and Douyu ranked first and second respectively, and users flocked to watch e-sports matches and follow professional gamers.

Reuters reported on Monday for the first time that the General Administration of Market Regulation blocked the transaction.

Tencent, Huya and Douyu did not immediately respond to requests for comment on the decision of the State Administration of Market Supervision.