Tencent vows to ‘distribute’ $20.3bn Meituan shares to investors
Tencent has vowed to give its shareholders $20.3bn (£17.4bn) worth of shares in Chinese food delivery firm Meituan as it seeks to reduce its holdings in China’s tech sector.
The Shenzhen conglomerate’s “special dividend” comes as its sales dropped two per cent year-on-year, to £16.6bn, on the back of a five per cent drop in its revenues from its online advertising business, to £2.6bn.
Tencent’s plans to divest from its 17 per cent stake in Meituan comes as the tech giant seeks to appease Chinese regulators amid a crackdown on the sector being led by Beijing.
China’s push to break up the country’s largest tech companies comes on the back of years of laissez faire regulation of the sector, that has seen it undergo fast-paced growth through large-scale M&A activity.
Higher revenues from Tencent’s music subscription and international gaming businesses partly offset the drop in revenues from its social networks and domestic gaming segments.
China’s clampdown on tech in August saw the country’s government introduce new rules limiting children from spending too much time playing video games.
Tencent said users under the age of 18 now spend 92 per cent less time playing video games than a year ago, while time spent playing games by adults has increased.
Tencent’s chief executive Ma Huateng said: “During the third quarter, we started to benefit from the adjustments that we have made to reposition ourselves for a new industry paradigm”.