© Reuters. FILE PHOTO: A Tencent logo is seen at its booth at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2020. REUTERS/Tingshu Wang
HONG KONG (Reuters) -China’s market regulator on Saturday said it would block Tencent Holdings (OTC:) Ltd’s plan to merge the country’s top two videogame streaming sites, Huya (NYSE:) and DouYu, on antitrust grounds.
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 $3 billion and growing fast.
Tencent is Huya’s biggest shareholder with 36.9% and also owns over a third of DouYu, with both firms listed in the United States, and worth a combined $5.3 billion in market value.
The State Administration Of Market Regulation (SAMR) said the decision was made after reviewing additional concessions proposed by Tencent for the merger.
Tencent filed for the antitrust review of the merger in January, according to SAMR’s announcement.
SAMR said Huya and DouYu’s combined market share in the video game live streaming industry would be over 70% and their merger would strengthen Tencent’s dominance in this market, given Tencent already has over 40% market share in the online games operations segment.
Huya and DouYu are ranked No. 1 and No. 2, respectively, as China’s most popular video game streaming sites, where users flock to watch e-sports tournaments and follow professional gamers.
Reuters first reported SAMR’s move to block the deal on Monday.
Tencent, Huya and DouYu did not immediately respond to requests for comment on the SAMR decision.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.