China’s Tencent plans to sell all or most of its $24 billion stake in food delivery company Meituan to comply with domestic regulatory requirements and liquidate an eight-year investment, four people familiar with the matter told Reuters. knowledge of the subject.
Tencent, which owns 17 percent of Meituan, has been working with financial advisers in recent months to work out how to sell its stake, three of the sources said.
Tech giant Tencent, owner of China’s No. 1 messaging app WeChat, first invested in Meituan’s competitor Dianping in 2014, which then merged with Meituan a year later to form the current company.
Based on Meituan’s market capitalization on Monday, Tencent’s 17% stake is worth $24.3 billion.
Tencent is looking to start the process of selling its stake this year if market conditions are favorable, two of the sources said.
The planned sale comes amid a sweeping regulatory crackdown in China from the end of 2020 on tech “heavyweight names”, after years of lax policy that has driven the industry to breakneck growth through big deals.
Meituan’s Hong Kong stock plunged 10% after the Reuters report.
Source: Capital
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