According to four independent sources, Tencent Holdings plans to sell its USD80bn stake in Meituan to satisfy domestic regulators and monetise an eight-year investment.
Tencent, which owns 17 per cent of Meituan, has been working with financial advisers to determine the most profitable way to sell its stake.
Tencent, the owner of China’s No. 1 messaging app WeChat, invested in Meituan’s rival Dianping in 2014, merging with Meituan just one year later. Tencent’s 17 per cent stake in Meituan is worth USD24.3bn, according to Meituan’s market capitalisation as of last Monday. If market conditions are favourable, Tencent will begin the sale this year.
A sweeping regulatory crackdown in China since late 2020 has targeted technology heavyweights who have been taking advantage of stake acquisitions and domestic market concentrations to build their empires. Over the past few years, laissez-faire policies have driven rapid growth and deal-making.
The Chinese regulators have been appeased, but Tencent has also been reducing its holdings in order to book big profits on its bets. According to its quarterly reports, its shareholdings in listed companies excluding its subsidiaries dropped from USD201bn last year to USD89bn as of end-March.
