China To Block Tencent’s Videogaming Merger

China’s antitrust regulator is set to formally block Tencent’s plan to merge the country’s top two videogame streaming sites, Huya and DouYu , three people familiar with the matter told Reuters.

Tencent has failed to come up with sufficient remedies to meet the State Administration of Market Regulation’s (SAMR) requirements on giving up exclusive rights, said two of the people.

The internet giant recently withdrew the merger application for antitrust review and refiled it after SAMR told the company it could not complete the review of the merger within 180 days since its first filing, one of them and a separate person said.

Separately, Tencent’s plan to take private search engine Sogou will be approved this month by SAMR, one of the people said. Reuters reported in April the regulator was ready to clear the plan.

Tencent first announced plans to merge Huya and DouYu last year in a tie-up designed to streamline its stakes in the firms, which were estimated by data firm MobTech to have an 80% slice of a market worth more than US$3 billion and growing fast.

Huya and DouYu are ranked No. 1 and No. 2, respectively, as China’s most popular video game streaming sites, where users flock to watch e-sports tournaments and follow professional gamers.