Tencent Plans to Sell Its Stake in Meituan

Tencent Plans to Sell Its Stake in Meituan
Photo: https://www.globaltimes.cn/page/202108/1231907.shtml 17.08.2022 221

Tencent has engaged financial advisors in recent months on ways to execute the sale of a roughly 17% stake, reported Reuters. The purpose of the sale is, among other things, to placate China's regulators.

China's Tencent Holdings plans to sell all or a bulk of its $24 billion stake in food delivery firm Meituan.

The planned sale may be associated with pressure on technology companies by Chinese regulators accusing these companies of monopoly — by selling Tencent wants to reduce its own risks.

Regulatory measures result in billions of dollars in fines for the Chinese tech giants and reshaping the companies by forcing them to make multi-billion dollar divestments.

"The regulators are apparently not happy that tech giants like Tencent have invested in and even become a big backer of various tech firms that run businesses closely related to people's livelihoods in the country," said one of the sources.

Tencent announced in December the divestment of around 86% of its stake in JD.com, worth $16.4 billion, weakening its ties to China's second-biggest e-commerce firm. 

One month later, it raised $3 billion by selling a 2.6% stake in Singapore-based gaming and e-commerce company SEA, which was seen as a move to monetise its investment while adjusting business strategy.

In April, Tencent announced the closure of its streaming game platform Penguin Esports. Although regulators resumed approving new games in April after a months-long hiatus intended to curb addiction, Tencent has yet to win a nod for a single title this year. 

digital markets  China 

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