China’s antitrust regulator plans to block Tencent’s plan to merge China’s two biggest video game sites, Hu Ya and Douyu, Reuters reported on Monday (July 5), citing three sources.
The sources said Tencent has not met a request from China’s State Administration of Market Supervision and Administration to give up its exclusive rights.
The Internet giant recently withdrew its merger application, but resubmitted it after the State Administration of Market Supervision and Administration told the company that it could not complete its review within 180 days of its initial merger submission, the sources said.
Sources close to the matter also said Tencent’s plan to buy privately held search engine Sogou will be approved by the State Administration of Market Supervision and Administration this month. Reuters reported in April that the regulator was ready to approve the plan.
Tencent last year announced plans to merge Tiger and Douyu to consolidate its holdings in the two companies. China’s live gaming market is more than $3 billion and is growing rapidly, with MobTech estimating that Tiger and Douyu have a combined market share of 80 percent.
Tiger and Douyu are the No. 1 and No. 2 popular live gaming sites in China, respectively, where users can watch e-sports tournaments and follow professional gamers.
Tencent is the largest shareholder in Tiger, with a 36.9 percent stake, and Tencent also owns more than a third of Douyu. Both companies are listed in the U.S. and have a combined market value of about $6 billion.
Reuters also reported in March, citing sources, that Tencent would have to make compromise concessions in the planned merger of Tiger and Douyu to defuse authorities’ anti-monopoly concerns.