Tencent is up today despite merger block by officials. China’s market regulator announced that it will block Tencent Holdings Ltd’s intentions to merge the two biggest videogame streamers. The company planned to merge Huya and DouYu, and this comes as an anti-trust matter.
Tencent decided to make this plan public knowledge last year in a merger designed to make its stakes smoother in the firms. These two companies are estimated by MobTech to have a portion of the market as big as 80%. The market is worth about $3 Billion and it shows no signs of slowing growth.
Tencent is Huya’s largest stock holder, owning an estimated 36.9%. Tencent also owns more than 1/3 of DouYu. Both companies are listed in the United States and are worth $5.3 billion in combined market value. The State Administration of Market Regulation announced the decision came down after an additional set of Tencent contractions on the merger itself.
SAMR said Huya and DouYu’s total market value in the video game live-streaming arena would be over 70% in the event of a merger. This would strengthen Tencent’s stranglehold on the market.
Huya and DouYu are ranked No. 1 and No. 2, respectively, as China’s most loved video game streaming platforms. Consumers use the sites to follow their favorite streamers and sports casters. Tencent remarked that it “will abide by the decision, comply with all regulatory requirements, operate in accordance with applicable laws and regulations, and fulfill our social responsibilities.”
The halt of this agreement comes at the same time as an ongoing tense situation emerging from Chinese tech companies and the administration. Before the second half of the year the anti-monopoly regulator fined Alibaba a whopping $2.75 Billion. MetaNews continues to monitor evolving regulations ion the Asia Pacific tech markets. Tencent is up today despite merger block by officials. China’s market continues to suffer from regulation increase.