China’s top market watchdog approved Tencent Holdings Ltd. TCEHY -3.36% ’s plan to privatize search-engine affiliate Sogou Inc. in a deal valued at around $2 billion that comes as the country’s technology giants face heightened antitrust scrutiny.
The unconditional blessing announced Tuesday by the State Administration of Market Regulation is likely a relief for Tencent, after the regulator last week blocked the tech conglomerate’s bid to combine the country’s two biggest game-streaming platforms.
Sogou, listed on the New York Stock Exchange, is a rival of 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 buying out other investors for about $2.1 billion last July.
Tencent’s shares jumped, rising 3.8% by early afternoon Tuesday 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 didn’t immediately respond to requests for comment.
As China ramps up its efforts to rein in its powerful, homegrown tech companies, regulators have been closely examining mergers, acquisitions and joint-venture deals in the sector.
On Saturday, the markets regulator ordered Tencent, China’s largest tech company by market value, to halt the merger of game-streaming platforms Huya Inc. and Douyu International Holdings Ltd., saying that combining the two companies would hurt competition. The pair account for more than 70% of the country’s game-streaming market by revenue.
Days before that it handed out fines to Tencent and other tech companies of roughly 500,000 yuan, the equivalent of $77,213, per deal for 22 mergers, acquisitions and joint ventures that were made without proper regulatory approval.
—Xiao Xiao contributed to this article.
Write to Yoko Kubota at [email protected]
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
