China’s antitrust regulator is set to formally block Tencent Holdings’ plan to merge the country’s top two videogame streaming sites, Huya and DouYu, three people familiar with the matter said.
Tencent has failed to come up with sufficient remedies to meet the State Administration of Market Regulation’s (SAMR’s) requirements on giving up exclusive rights, said two of the people.
The Internet giant recently withdrew the merger application for antitrust review and refiled it after SAMR told the company it could not complete the review of the merger within 180 days since its first filing, one of them and a separate person said.
The people declined to be named as the information is private. Tencent — China’s number one videogame and social media company — Huya, DouYu and the SAMR did not immediately respond to requests for comment.
Separately, Tencent’s plan to take private search engine Sogou will be approved this month by SAMR, one of the people said.
Tencent first announced plans to merge Huya and DouYu last year in a tie-up designed to streamline its stakes in the firms, which were estimated by data firm MobTech to have an 80% slice of a market worth more than US$3-billion and growing fast.
Huya and DouYu are ranked number one and number two, respectively, as China’s most popular videogame streaming sites, where users flock to watch e-sports tournaments and follow professional gamers.
Tencent, which is 28.9% held by Prosus, the European spinoff of South Africa’s Naspers, is Huya’s biggest shareholder with 36.9% and also owns over a third of DouYu, with both firms listed in the US, and worth a combined $6-billion in market value.
Reuters reported in March, citing people with knowledge of the matter, that Tencent was having to offer concessions in a plan to merge Huya and DouYu in order to resolve antitrust concerns. — Reported by Pei Li, Yingzhi Yang, (c) 2021 Reuters