China’s top market regulator approved Tencent Holdings Limited.
The plan to privatize the search engine subsidiary Sogou INC.
in a deal valued at around $ 2 billion that comes as the nation’s tech giants face heightened antitrust scrutiny.
The unconditional blessing announced Tuesday by the State Administration for Market Regulation is likely a relief for Tencent, after the regulator last week blocked the tech conglomerate’s offer to combine the country’s two largest game streaming platforms.
Sogou, which is listed on the New York Stock Exchange, is a rival to Baidu. INC.,
China’s largest search engine service provider. Tencent, which owns 39% of Sogou and controls more than half of its voting rights, proposed to buy from other investors for about $ 2.1 billion last July.
Tencent shares rose, rising 3.8% early Tuesday afternoon in Hong Kong to 555 Hong Kong dollars, the equivalent of $ 71.46 per share. The city’s Hang Seng Tech Index gained 2.1%.
Tencent and Sogou did not immediately respond to requests for comment.
As China intensifies its efforts to curb its powerful local tech companies, regulators have been closely scrutinizing mergers, acquisitions and joint venture deals in the sector.
On Saturday, the markets regulator ordered Tencent, China’s largest technology company by market value, to halt the merger of game streaming platforms Huya Inc. and Douyu International Holdings Ltd., saying the combination of the two companies would hurt the competition. The couple represents more than 70% of the country’s game streaming market by revenue.
Days earlier, it imposed fines on Tencent and other technology companies of approximately 500,000 yuan, the equivalent of $ 77,213, per deal for 22 mergers, acquisitions and joint ventures that were conducted without proper regulatory approval.
—Xiao Xiao contributed to this article.
Write to Yoko Kubota in [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8