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China: Gaming giant Tencent may acquire parent company of Bitstamp, Korbit Crypto Exchanges

ambcrypto.com 23 January 2019 11:10, UTC
Reading time: ~2 m

The Chinese gaming giant, Tencent Holdings Ltd. is contemplating a bid for the gaming company in South Korea that hold Nexon, reported Reuters. The company is not only considering a deal but also making the company private.

According to the publication, the founder of the South Korean company, Kim Jung-ju is also planning to sell a controlling 98.64% stake in NXC Corp, Nexon’s holding firm. The 98.64% stake is held by Jung-ju himself and other related parties including his wife, as per the Korea Economic Daily. The stake is worth between $7.1 billion and $8.9 billion.

According to the sources of Reuters, Deutsche Bank and Morgan Stanley are running the sale, however, the two denied to comment. Goldman Sachs is chosen by Tencent to be its adviser, and other potential bidders as per reports are, KKR & Co Inc, TPG Capital, Calyle Group, and MBK Partners.

Nexon has developed more than 80 live games in over 190 countries since it was founded in 1994. The hit games of the company include IP-franchise like MapleStory, Dungeon & Fighter, Sudden Attack, and KartRider. The company bought a stake in Bitstamp in 2018, took over ownership of Korbit in 2017, and owns soul license to operate Dungeon & Fighter in China.

The growing criticism of video games for being violent and causing problems like myopia and addiction among young users resulted in the crackdown from Chinese authorities. The authorities stopped approving titles from March to December. In this brief interval, Tencent had lost billion in its market value. The report states that even after authorities started greenlighting a limited number of games this month, Tencent’s offering is notably absent from the approval list.

However, the NXC purchase might give Tencent a foothold int he crypto-world and enable it to expand. According to a report from CCN, the famous gaming company Tencent, will be owning two major bitcoin exchanges.

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