Chinese market regulator, State Administration of Market Regulation (SAMR), says thet it will be blocking a merger deal between Tencent Holding Ltd (HK: 0700) and China’s leading two videogame streaming websites namely Huya (HUYA) and Douyu.
The antitrust regulator says that it will be blocking this merger deal on antitrust grounds after reviewing additional concessions proposed by Tencent for the merger deal.
This merger deal was first announced by Tencent last year in a tie-up designed in such a way to help streamline its stake in the two companies. Data firm MobTech estimates the two sites to have an 80% market share in China.
Tencent is the biggest stakeholder in Huya holding 36.9% stake in the company, it also holds around 33% stake in DouYu. Both companies are listed in the United States markets and they have a combined market valuation of $5.3 billion.
The regulator claims Tencent already has more than 40% market share in online gaming space in China thus, if left to go ahead with the merger deal, it will increase its market share to over 70% giving the company complete dominance in the video game live streaming industry.
Tencent has pledged to abide by the decision which the antitrust regulator will settle on. “We will abide by the decision, comply with all regulatory requirements, operate in accordance with applicable laws and regulations, and fulfill our social responsibilities,” said Tencent.