Tencent’s 1.3 billion sumo deal under US security investigation

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A US national security body is investigating Tencent Holdings’ $ 1.27 billion (approximately Rs.9.518 billion) takeover of Sumo Group, the British video game maker said on Friday as a possible setback for the Chinese internet giant.

Sumo, which has studios in the United States and four other countries, said Tencent has agreed to offer commitments to approve the United States Foreign Investment Committee (CFIUS), which evaluates deals to ensure they are national Do not compromise security.

The secret task force, which is also investigating the US sale of the video sharing app TikTok, had tightened its examination of Chinese deals under ex-President Donald Trump.

Tencent closed a deal with sumo in July just days after the Chinese market regulator blocked its plans to merge video game streaming sites Huya and DouYu for antitrust reasons.

Sumo and Tencent are working with the CFIUS to get approval for the takeover before the end of the year, the British firm said on Friday.

Sheffield-based Sumo customers and partners include the XBOX game studios from Microsoft, Apple and Alphabets Google.

The deal would merge Sumo’s racing and snooker games with Tencent’s higher profile range of games, which includes the mobile version of Call of Duty.

© Thomson Reuters 2021

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