Tencent plans to divest Meituan stake worth $24 billion
China’s Tencent Holdings Ltd plans to sell all or bulk of its $24 billion stake in food delivery firm Meituan to appease regulators in Beijing and monetize an eight-year-old investment, Reuters reported on Tuesday, citing four sources with knowledge of the matter
China’s Tencent Holdings Ltd plans to sell all or bulk of its $24 billion stake in food delivery firm Meituan to appease regulators in Beijing and monetize an eight-year-old investment, Reuters reported on Tuesday, citing four sources with knowledge of the matter.
Meituan plummeted more than 10% in Hong Kong, while video service Kuaishou Technology fell more than 4%, and Bilibili Inc dipped 2.5%. In New York, e-commerce firm Pinduoduo Inc (NASDAQ: PDD) slipped around 4%.
Tencent, the Chinese social media giant which owns 17% of Meituan, has engaged financial advisors in recent months on ways to execute the sale, the report said.
Based on Meituan’s market value as of Monday, Tencent’s 17% stake is worth $24.3 billion. Tencent is planning to liquidate its stake within this year if market conditions are favorable, sources told Reuters.
Beijing, since late 2020, has started curbing the influence of tech industry leaders from Tencent to Alibaba Group Holding Ltd.
The two tech giants exert enormous control over the Chinese internet economy through part-ownership of hundreds of startups and publicly traded firms.
Tencent controlled 606 billion yuan ($89.2 billion) of listed company investments as of March.
The WeChat operator last year began disclosing plans to sell shares in investees such as e-commerce giant JD.com Inc.
Picture Credit: BBC
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