China blocks Huya, DouYu merger

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A mooted merger between two videogame streamers, Huya and DouYu, has been blocked by Chinese authorities on antitrust grounds.

The planned merger, announced by Tencent which wanted to bring together the two businesses in which it held stakes, could have resulted in Tencent controlling some 80 per cent of the Chinese market already worth an estimated $3 billion – and still growing fast.

Tencent has a 36.9 per cent stake in Huya, and controls more than one-third of DouYu. Both outfits are listed in the US and with a reported $5.3 billion market capitalisation. Huya and DouYu are the Number 1 and 2 companies in China’s most popular video game sites.

China’s State Administration of Market Regulation (SAMR) said Huya and DouYu’s combined market share in the video game live-streaming industry would be over 70 per cent and their merger would strengthen Tencent’s dominance in this market, given Tencent already has more than 40 per cent market share in the online games operations segment.

Earlier this year, the Chinese anti-monopoly regulator placed a record $2.75-billion fine on e-commerce giant Alibaba for engaging in anticompetitive behaviour.


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