Hong Kong: China Market Regulator on Saturday said it would block the plan Tencent Holdings Ltd to combine the two top video video streaming sites, Huya and Douyu, with antitrust reasons.
Tencent first announced plans to combine Huya and Douyu last year in a tie-up designed to streamline the stakes in the company, which was estimated by the Mobtech data company to have a market slice of 80% worth more than $ 3 billion and developed rapidly.
Tencent was Huya’s largest shareholder with 36.9% and also had more than a third of Douyu, with both companies listed in the United States, and worth $ 5.3 billion in market value.
Reuters first reported the market administration of the Market (SAMR) planned to block the agreement on Monday, which came after the regulator reviewed the additional concession proposed by Tencer to merge.
SAMR said the joint market share of Huya and Douyu in live streaming video games will be more than 70% and their merger will strengthen the dominance of Tencent in this market, which Tencent has been given more than 40% market share in the online game operating segment.
Huya and Douyu Have Ranking No.
1 and No.
2, like the most popular video game website in China, where users flock to watch the e-Sports tournament and follow professional gamers.
Tencent said in a statement “will obey the decision, comply with all regulatory requirements, operating in accordance with applicable laws and regulations, and fulfill our social responsibility.” The termination of the agreement came amid the ongoing crackdown in a Chinese technology company from the government.
Earlier this year, anti-monopoly regulators put a record of $ 2.75 billion well on the Alibaba e-commerce giant because it was involved in anti-competitive behavior.
Huya and Douyu did not immediately respond to the request to comment on SAMR’s decision.
In Memo from SAMR, which was published in conjunction with the announcement, Zhang Chenying, a member of the Anti-Trust Committee of the State Council, argued that the agreement would prevent fair competition.
“If Huya and Douyu will join, the control of the original Douyu joint will be a full control of the combined entity,” Zhang wrote.
“Given factors such as income, active users, livestreaming resources and other key indices, we can hope that the merger will eliminate or limit fair competition.”