Tencent Targets About $14.5 Billion in Divestments, FT Says

(Bloomberg) -- Tencent Holdings Ltd. has set a soft target of divesting about 100 billion yuan ($14.5 billion) of its $88 billion listed equity portfolio this year as it shifts strategy, the Financial Times reported, citing two unidentified people familiar with the matter.

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Food-delivery service Meituan is among the assets that are in the pipeline for divestment, the paper reported. A reduction in the stake could ease pressure from anti-monopoly regulators.

A spokesperson for Tencent disputed the report in an emailed statement. “We don’t have any target amounts for divestments,” the spokesperson wrote. “We have always invested with the goal of generating strong returns for our company and shareholders, not according to any arbitrary timeline or target. Nor have we received any external pressure regarding our investment portfolio.”

Beijing since late 2020 has worked to curb the influence of tech industry leaders from Tencent to Alibaba Group Holding Ltd. The two companies exert enormous sway over the Chinese internet economy through part-ownership of hundreds of startups and publicly traded firms.

The WeChat operator last year began disclosing plans to sell shares in investees such as e-commerce giant JD.com Inc. and Southeast Asia’s Sea Ltd. That in turn spurred speculation it would soon consider paring stakes in other firms such as Meituan and Pinduoduo Inc. Earlier this month, Tencent executives said a report that the company planned to sell all or most of its $24 billion stake in Meituan was not correct.

The Shenzhen-based company’s biggest investments include Sea Ltd., Kuaishou Technology and Bilibili Inc.

The American depositary receipts of Pinduoduo dropped as much as 1.8% in extended trading in New York, while Sea slipped as much as 1.3%.

The disinvestment drive has begun though there are still discussions on which stakes in non-core businesses would be pared, and the price, the FT reported. Sales would depend on market conditions and internal targets.

(Updates with Tencent comment in the third paragraph.)

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