Chinese technology giant Tencent Holdings is planning to sell most or all of its stake in e-commerce and food delivery platform Meituan, it was reported on Tuesday.
Tencent owns 17% of Meituan, with Reuters citing “four sources with knowledge of the matter” as saying it was planning to sell down its investment, valued at $24.3bn, in a bid to appease regulators in Beijing.
It said Tencent had engaged financial advisors in recent months, and was looking to start the sale by the end of the year, depending on market conditions.
Since late 2020, authorities in China have been cracking down on the country’s tech behemoths, with their sights set on their large-scale acquisitions and market concentration.
“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,” one of the sources told Reuters.
Tencent’s investments in various Asian tech plays have taken a hit recently, with the value of its investments, excluding subsidiaries, falling to $89bn in its accounts to the end of March, from $201bn at the same time last year.
It sold 86% of its stake in Chinese e-commerce giant JD.com in December for $16.4bn, and booked $3bn in January by selling a 2.6% holding in Singaporean gaming and online shopping firm SEA.
The sources told Reuters that the sale of Meituan would likely be through a block sale on the open market.
Reporting by Josh White at Sharecast.com.
