By Pei Li and Yingzhi Yang
(Reuters) – China’s antitrust regulator is likely to formally block Tencent’s plan to merge the country’s two main video game streaming sites, Huya and DouYu, three sources familiar with the matter told Reuters.
Tencent, China’s largest video game and social media company, could not find enough resources to meet the State Administration for Market Regulation’s requirements regarding the waiver of exclusive rights, two of the sources said.
The internet giant recently withdrew the merger request for antitrust review and resubmitted it after the agency told the company it could not complete the merger review within 180 days of its first filing, sources say.
Tencent, Huya, DouYu and the regulator did not immediately respond to Reuters’ requests for comment.
Separately, Tencent’s plan to delist the Sogou search engine will be approved this month by the antitrust body, one of the people said. Reuters reported in April that the regulator was ready to approve the plan.
Tencent first announced plans to merge Huya and DouYu last year in a deal designed to simplify their holdings in companies, which data company MobTech estimates have 80% share of a market worth more 3 billion dollars.
Huya and DouYu are ranked first and second respectively as China’s most popular video game streaming sites, where users flock to watch e-sports tournaments and follow professional players.
Tencent is Huya’s largest shareholder with 36.9% and also owns more than a third of DouYu, with both companies listed in the US, and with a combined value of $6 billion in market value.
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