Tencent Denies Nexon Acquisition Rumors

Tencent Holdings Ltd. has recently addressed rumors circulating in the gaming community regarding its potential acquisition of Nexon, a prominent South Korean-Japanese video game developer. Sources close to Tencent have revealed that the company has neither been in contact with the founder's family to discuss the deal nor is considering acquiring Nexon. This clarification comes in response to earlier reports suggesting that Tencent was exploring the acquisition of Nexon at a valuation of $15 billion and had already engaged with the founder's family.

Tencent's clarification is significant as it contradicts previous reports that indicated the Chinese tech giant was actively pursuing the acquisition of Nexon. The potential deal, if it had materialized, would have further solidified Tencent's presence in the Korean cultural content market. Tencent has a history of interest in Nexon, having been named as a potential bidder in 2019 when NXC, which controls 44.4% of Nexon, was put up for sale. However, the sale was eventually called off without a deal.

Tencent has been strategically investing in the Korean cultural content market, holding significant stakes in several prominent game developers and entertainment companies. The family of Nexon's late founder, Kim Jung-ju, owns about 67.6 percent of the game giant’s holding company NXC. Through NXC, they own a 44.4 percent stake in Nexon. The other 30.64 percent stake in NXC is owned by the government. Kim’s relatives turned in the shares worth roughly 4.7 trillion won to the government to pay off an inheritance tax. The Finance Ministry has been trying to sell the stake through a tender offer but has failed on multiple occasions.

In May, Tencent Music Entertainment, a subsidiary of the Chinese tech giant, acquired the entire 9.38 percent stake of K-pop powerhouse SM Entertainment held by Hybe, valued at approximately 200 billion won. This acquisition positioned Tencent as the second-largest effective shareholder of SM. Despite these strategic investments, Tencent's recent clarification indicates that the company is not currently pursuing the acquisition of Nexon. This development leaves the future of Tencent's involvement in the Korean cultural content market uncertain, as the company may explore other opportunities in the region.