China Blocks $5.3 Billion Merger of Live Streaming Firms Huya and DouYu

Chinese regulators have formally blocked the proposed merger of Huya and Douyu, two of the country's largest live streaming operators. The planned merger had been orchestrated by social media and gaming giant Tencent and had been valued at approximately $5.3 billion. "If Huya and Douyu merged, that would further strengthen Tencent's dominant position in the video game live-streaming market," the regulator said. "This has the effect of eliminating or restricting competition, is not conducive to fair market competition. It is not conducive to the healthy and sustainable development of the online gaming and video game live streaming market." The blocking of the Huya-DouYu merger represents a strategic and financial setback for Tencent. After completion Tencent would then have sold its own game live streaming business Penguin eSports for $500 million, enabling a three-way consolidation of the sector. Tencent is already publisher in China of the mobile versions of "PUBG" and "Call of Duty," and owner of share stakes in dozens of games firms in Asia, Europe and the U.S. Taking a dominant position in the gaming live streamers would allow Tencent to also capture more of the esports revenue being derived from its titles.