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Tencent headquarters in the southern Chinese city of Shenzhen, in Guangdong province. Photo: AFP

China’s antitrust watchdog to block Tencent’s merger of Huya and Douyu

  • Tencent has failed to come up with sufficient remedies to meet SAMR requirements on giving up exclusive rights, according to sources familiar with the matter
  • The internet giant recently withdrew the original merger application and refiled it to the SAMR
Tencent
China’s antitrust regulator is set to formally block Tencent Holdings’ plan to merge the country’s top two video game-streaming sites, Huya and Douyu, three people familiar with the matter told Reuters.

Tencent has failed to come up with sufficient remedies to meet the State Administration for Market Regulation’s (SAMR) 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.

Merger of Tencent-backed game streamers remains in limbo amid Beijing’s scrutiny

Tencent – China’s number one video game and social media company – Huya, Douyu and the SAMR did not immediately respond to Reuters' 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. Reuters reported in April the regulator was ready to clear the plan.
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 per cent 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 video game-streaming sites, where users flock to watch esports tournaments and follow professional gamers.

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Tencent is Huya’s biggest shareholder with 36.9 per cent and also owns over a third of Douyu, with both firms listed in the United States, and worth a combined US$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 to resolve antitrust concerns.

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