Meituan is one in all China’s biggest meals supply corporations. Supply drivers will also be noticed zipping round Chinese language towns. Tencent first subsidized rival Dianping in 2014 which merged with Meituan to shape the present corporate.
Jade Gao | AFP | Getty Pictures
Stocks of Chinese language meals supply massive Meituan plunged 9% on Tuesday after Reuters reported Tencent is making plans to promote the vast majority of its $24 billion stake within the corporate.
Tencent, which owns 17% of Meituan, is making plans to placate home regulators and money in on its eight-year-old funding, Reuters reported, bringing up 4 assets with wisdom of the subject.
A Tencent spokesperson mentioned it does “no longer touch upon marketplace hypothesis” when contacted via CNBC. Meituan used to be no longer in an instant to be had for remark.
Stocks of Tencent closed 0.8% upper in Hong Kong.
Tencent, which owns China’s No. 1 messaging app WeChat, is having a look to kick off the proportion sale this 12 months if marketplace prerequisites are favorable, Reuters reported.
A supply with wisdom of the subject advised CNBC that there aren’t any present plans for Tencent to promote its Meituan stake.
Tencent invested in an organization known as Dianping in 2014 which then merged with Meituan a 12 months later to shape the present entity.
Investments made via China’s era corporations have come underneath scrutiny as a part of Beijing’s sweeping crackdown at the nation’s giants. Chinese language government have seemed to rein within the energy of era giants via tighter law in spaces starting from antitrust to information coverage.
Reuters reported that a part of Tencent’s reasoning at the back of the divestment of the Meituan stake is fulfilling regulators fearful about tech giants backing corporations carefully associated with peoples’ livelihoods.
During the last few months, Tencent has been divesting stakes in a few of its greatest investments.
In December, Tencent mentioned it will divest maximum of its stake in China’s second-largest e-commerce participant, JD.com.
In January, Tencent raised $3 billion throughout the sale of a few of its stocks in Singapore-based gaming and e-commerce company Sea.
Tencent’s proportion gross sales come at a time of slowing enlargement for the Chinese language era massive, which has been hit via a slowdown on the planet’s second-largest financial system and stricter law at the home gaming sector. Tencent is China’s greatest gaming company.
Learn the whole Reuters record right here.