China’s Tencent Holdings (0700. HK) plans to sell all or a bulk of its $24 billion stake in food delivery firm Meituan (3690. HK) to placate domestic regulators and monetise an eight-year-old investment, four sources with knowledge of the matter said.
Tencent, which owns 17% of Meituan, has been engaging with financial advisers in recent months; to work out how to execute a potentially large sale of its Meituan stake, said three of the sources.
The planned sale comes against the backdrop of China’s sweeping regulatory crackdown since late 2020 on technology heavyweights that took aim at their empire building via stake acquisitions and domestic concentration of market power.
That crackdown, which has led to billions of dollars in fines for the Chinese tech giants, is reshaping the companies by forcing them to make multi-billion dollar divestments. Tencent, for instance, is exiting a clutch of businesses now and pivoting towards the global gaming market.