China's Tencent to Receive $16 Billion Special Dividend from JD.com Stake

[Asia Economy Reporter Geum Boryeong] Tencent, a leading Chinese big tech company facing pressure from authorities, has decided to distribute its stake worth 127.7 billion Hong Kong dollars (approximately 19.4614 trillion KRW) in the e-commerce company 'Jingdong.com' to its shareholders.

According to Bloomberg on the 23rd, Tencent announced that it will pay a special dividend of 457.3 million shares, which is 86.4% of its holdings in Jingdong.com. Based on the closing price of the Hong Kong stock market on the 22nd, this stake in Jingdong.com is worth 127.7 billion Hong Kong dollars, accounting for 15% of Jingdong.com's total issued shares.

Accordingly, Tencent shareholders will receive 1 share of Jingdong.com stock as a special dividend for every 21 shares they hold. With this dividend, Tencent's stake in Jingdong.com will decrease from about 17% to 2.3%.

Martin Lau, President of Tencent, also decided to immediately resign from his position as a director of Jingdong.com. Tencent explained that it judged now to be the right time to transfer shares because Jingdong.com has reached a stage where it can raise funds and grow independently.

Additionally, despite the reduction in shares, Tencent added that it will continue to maintain a mutually beneficial business relationship, including a strategic partnership with Jingdong.com. A source said that Tencent chose a special dividend instead of a market sale to avoid a sharp drop in Jingdong.com's stock price and huge taxes, and that there are currently no plans to handle stakes in other companies besides Jingdong.com.

Bloomberg reported that Tencent, under strong pressure from authorities, likely decided on the special dividend based on both managerial judgment and political considerations mindful of the authorities, and raised the possibility that Tencent might handle stakes in other companies as well.

As of the end of September, Tencent has invested in e-commerce company Pinduoduo, food delivery platform Meituan, video service platform Kuaishou, Tesla, Spotify, and others, with a total investment scale reaching 185 billion dollars (approximately 220 trillion KRW).

This content was produced with the assistance of AI translation services.