Trump administration investigates Tencent's US gaming investments and acquisitions

According to Bloomberg, a number of gaming companies received letters asking them to disclose the security protocols used in the processing of Americans’ personal data. Riot Games and Epic Games are among those receiving the requests. This is because Tencent fully owns Riot and has a 40% stake in Epiс. The Chinese giant also owns stakes in Activision Blizzard, Discord, Glu Mobile and Reddit.

Depeding on the Committee’s findings, it can recommend that the president block or unwind deals.

Bloomberg attributes the hightened attention of the intelligence services to Tencent’s US investments to the trade tensions between China and the United States. With the upcoming November elections, President Donald Trump is taking increasingly aggressive actions towards Beijing.

Tencent’s U.S. gaming investments, including Riot Games, Epic Games and Activision Blizzard may be at risk of forced divestment similar to ByteDance’s TikTok with the Committee on Foreign Investment in the U.S. launching an inquiry on national security grounds. We estimate Tencent’s U.S. assets could be worth at least $22 billion, and account for 6-7% of its sales and profits.

Vey-Sern Ling and Tiffany Tam, analysts, via Bloomberg

Whatever the outcome may be, the situation has already sank Tencent’s shares by 2.8% reducing their annual growth to 36%.