Tencent to offload US$16 billion stake in No 2 e-commerce player JD.com as China’s antitrust pressure mounts

The market value of JD.com shares to be transferred is estimated at US$16 billion, according to a Tencent statement issued on Tuesday

Tencent is under pressure to be a neutral infrastructure service provider amid Beijing’s push for interconnectivity, forcing it to open its ecosystem to JD.com’s rivals

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Tencent headquarters in Shenzhen, China. The company is divesting its investment in JD.com under antitrust pressure from Beijing. Photo: Bloomberg

Published: 10:55am, 23 Dec 2021Updated: 4:12pm, 23 Dec 2021

Tencent Holdings said it would distribute most of its shares in JD.com as a special dividend to investors, as China’s dominant social media network made a surprise move to pare back its stake in the country’s second-largest e-commerce platform in response to Beijing’s antitrust demands.

The market value of JD.com shares to be transferred is estimated at HK$127.7 billion (US$16.37 billion), according to a Tencent statement issued on Thursday. Shenzhen-based Tencent, previously the biggest shareholder in JD.com, will see its stake in the company fall to 2.3 per cent from 17 per cent after the transfer.

Tencent president Martin Lau Chi-Ping has stepped down from JD.com’s board, effective immediately.

Tencent said in the statement that its strategy was to “exit the investments [where appropriate] as the investees become consistently capable of self-financing their future initiatives,” adding that JD.com has now reached that position.

Tencent is looking for return on its investments as its portfolio gets bigger, and JD.com was one of the self-sufficient companies that the internet giant has helped grow, according to a company source who declined to be named.

The divestment will not affect its strategic collaboration with JD.com in areas such as online payments and advertising, and Tencent has no similar plan for its other investee companies, the person said.