Tencent Withdraws from Warner Bros Bid Amid National Security Concerns, Paramount Advances
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In a move that has sparked national security concerns, Chinese gaming giant Tencent Holdings has withdrawn from Paramount's bid to acquire Warner Bros Discovery, citing potential scrutiny from the Committee on Foreign Investment in the United States (CFIUS). Paramount's revised filing with the U.S. Securities and Exchange Commission revealed that Tencent's $1 billion financing commitment was dropped due to concerns that its involvement might trigger a CFIUS review. The Chinese company's decision comes as Paramount launches a hostile $77.9 billion takeover offer for Warner Bros Discovery, competing with rival bidder Netflix. To avoid additional scrutiny, foreign sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar, which are providing $24 billion for Paramount's bid, have agreed to give up their right to participate in Warner Bros' management. Tencent's withdrawal marks a significant shift in the entertainment industry, where foreign investment is increasingly subject to national security reviews. The U.S. Defense Department has listed Tencent as a company with ties to China's military, although the company denies these allegations. As the world's largest equity investor in online games, Tencent has significant ties to the U.S. entertainment industry, including a streaming deal with the National Basketball Association and a stake in Riot Games, the developer of League of Legends. The company's market capitalization exceeds $700 billion, making it a major player in the global entertainment and social media landscape.
