Chinese social media and gaming giant Tencent Holdings has pulled out of US media group Paramount Skydance Corp’s takeover bid for Warner Bros Discovery to avoid heightened scrutiny of foreign investment in the United States, according to a filing on the US Securities and Exchange Commission’s website.
Tencent had pledged US$1 billion as part of Paramount’s December 1 proposal to acquire Warner Bros, but the Shenzhen-based company was removed as a financing partner in Paramount’s latest all-cash offer of US$30 per share announced on Monday.
The change followed concerns from Warner Bros that Tencent’s role as a non-US equity financier could trigger a review by the Committee on Foreign Investment in the United States (CFIUS), Paramount said in its filing.
“Tencent will no longer be a financing partner in the transaction,” the company said in its revised proposal to Warner Bros dated December 4, and disclosed on Monday.
Tencent did not immediately respond to a request for comment on Tuesday.
Tencent’s failed bid to take a financial role in a deal that could shape the future of Hollywood underscored how US regulatory oversight is narrowing the space for Chinese investment in big-ticket US media and technology deals.
Hong Kong-listed Tencent, China’s most valuable technology conglomerate, operates the super app WeChat – known as Weixin in mainland China – and runs blockbuster game titles including Honor of Kings, PUBG Mobile and League of Legends.
