Tencent outspent Baidu, Alibaba in tech mergers and acquisitions

Chinese internet giant Tencent Holdings has surged ahead of rivals Baidu and Alibaba Group Holding in terms of acquisitions, with total spending of US$6.7 billion at the end of May, as the company seeks to cement its position as a leader in the global gaming industry.

Shenzhen-based Tencent is also the biggest spender among the mainland’s three biggest technology companies – often referred to collectively as BAT – over the past five years, splashing out US$62.5 billion since 2012, according to data from market intelligence firm Mergermarket.

Its largest deal within the last year was the purchase of an 84.3 per cent stake in Finnish mobile game company Supercell Oy, valued at US$8.6 billion.

“Tencent, with its soaring market cap, is the only one of the three which has been increasing its mergers and acquisitions activity each year,” said Wang Yiqing, China editor of Mergermarket. “As China’s largest game developer, Tencent’s takeover of Supercell also strengthened its lead in the world’s gaming industry, and there is no sign that Tencent will slow down its steps in overseas gaming M&A.”

Baidu lagged behind, with just US$8 billion in mergers and acquisitions since 2012, eight times less than Tencent. This year, it has spent only about US$1.1 billion on deals.

Most of Baidu’s investments fit within its current business portfolio, according to Mergermarket, whereas Alibaba and Tencent tend to seek opportunities in new areas.