The company plans to distribute more than $16 billion of its stake in JD.com to its shareholders as a one-time dividend, according to the company. reported Chinese gaming and social media giant.
The technology conglomerate will begin delivering 460 million JD.com common shares to shareholders in March.
These shares, which Tencent plans to offer, represent 86.4 percent of its stake in JD.com, or 14.7 percent of the total shares issued to JD.com.
The company currently controls 17 percent of JD.com. But its share after the distribution drops to 2.3 percent, which means that it will not be the largest shareholder in JD.com.
JD.com founder Richard Liu Qiandong, who owns 13.9 percent of the shares, becomes the largest shareholder, according to another a report yearly for the company. Wal-Mart is in second place with a share 9.3 percent.
The sudden decline of Tencent comes at a time when the country’s Internet giants are under intense pressure from Beijing.
Over the past year, China has increased scrutiny of the technology industry. It published detailed rules designed to tackle unfair competition. Huge fines were imposed on companies. Some companies demanded a complete overhaul of their businesses.
Tencent said JD.com has reached a position where it can fund its own growth. calendar So now is the time to transfer the majority of the stake to its shareholders.
This move may reduce Tencent’s market dominance. It is likely to be an attempt to shift toward fairer competition, as well as be more in line with the agenda of the Chinese authorities.
Tencent’s move comes as Beijing ramps up regulatory scrutiny of the sector
As part of the deal, Martin Lau, president of Tencent, is stepping down from his position on JD.com’s board of directors. The two companies said in separate statements that the two companies continue to maintain a mutually beneficial working relationship, including their ongoing strategic partnership agreement.
Over the past decade, the company has been one of the country’s most active investors, having sponsored hundreds of tech startups.
It has also slowly amassed a publicly traded investment portfolio of $190 billion as of September 30, equivalent to roughly a third of its total market capitalization.
Its most valuable stake includes 16 percent of the Pinduoduo e-commerce group. and 17 percent of the Meituan food delivery group. And about 18 percent of the Kuaishou short video application. It also owns shares in US companies such as Snapchat and Tesla.
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