Tencent withdraws billion dollars. from the takeover of WBD. He was afraid of the inspection
Paramount Skydance claims that Chinese gaming and social media giant Tencent Holdings has withdrawn its offer to buy Warner Bros Discoveryto avoid possible national security scrutiny.
See also: Will the giants outbid? The fight for a major takeover is intensifying
How we reported recentlyParamount Skydance announced a hostile takeover bid for Warner Bros. Discovery worth $108.4 billion. In this way, the company has upped the ante and wants to overtake Netflix.
It was revealed over the weekend that Warner Bros. corporation Discovery (WBD) on Friday accepted Netflix's offer to buy part of the company. He estimated the enterprise value of the acquired part of WBD at USD 82.7 billion, while the total value of the shares is USD 72 billion.
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In response to Netflix's move, Paramount Skydance made a hostile bid on Monday to acquire Warner Bros. Discovery for $77.9 billion.
Tencent withdraws billion dollars. from the takeover of WBD. He was afraid of the inspection
As reported by the Associated Press, Chinese giant Tencent, which initially planned to financially support the deal, withdrew, fearing that its involvement as a “source of non-U.S. equity financing” could attract the attention of CFIUS. Interestingly, approval by the Foreign Investment Committee was not a condition for submitting an offer.
The Chinese company has not yet issued an official comment on this matter. Tencent, whose shares are listed in Hong Kong, has previously denied accusations of ties to the Chinese military that have surfaced in the context of other company activities.
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As the Associated Press points out, Tencent's withdrawal from the deal shows how geopolitical tensions and national security concerns are affecting global investment.
CFIUS, the US institution that examines foreign mergers for potential risks, has become increasingly important in recent years. Tencent's decision may be a signal to other Chinese companies that investing in the US involves regulatory risk.
See also: Little known facts about the owner of TVN. Its founders have links with Poland
Tencent's withdrawal from the transaction may affect further investment relations between China and the US. It is worth recalling that Tencent is one of the largest investors in the online gaming industry and holds shares in many American entertainment companies.
Tencent, known for the popular WeChat application and owning Riot Games, remains one of the largest players in the global technology and entertainment market.
