Chinese merger of Tencent financialy backed streaming technology companies rejected and blocked.
According to some sources, Tencent failed to get permission from the State Administration of Market Regulations (SAMR). SAMR requirements demanded Tencent to give up its exclusive rights which Tencent failed to meet. Moreover, Tencent also withdrew the antitrust review application for the merger of DouYu and Huya. This withdrawal of application results in a wait of 180 days for the refiling application process according to the instructions given by SAMR.
Tencent’s plan to merge both these companies surfaced last year. Tencent has a majority stake in Huya and owns 38% shares in rival platform DouYu. With this merger, Tencent would have owned a lion’s share of 67% in the newly built after merger game streaming company. Moreover, this merger would have resulted in a consolidation of more than 80% of all game streaming markets in China.
This would have meant that Tencent would have gotten hold of this chunk in the Chinese game streaming market. Thus comes the anti-competitive factor in this merger.
If things had gone according to the plans, this merger would have been completed during the first half of 2021. However, now China’s State Administration for Market Regulation has stepped in and rejected the merger altogether.