Tencent Not Considering Nexon Acquisition

Chinese tech giant Tencent Holdings is neither considering nor pursuing an acquisition of South Korean videogame developer Nexon Co. contrary to media reports, according to a person with direct knowledge of Tencent’s investment plans.

Last week, Bloomberg reported that Tencent had reached out to the family of Nexon’s late founder Kim Jung-ju to discuss a possible deal to acquire the South Korean company. But the person, who also has direct knowledge of Tencent’s relationship with Nexon, said Tencent hasn’t held any discussions with Nexon, its parent company NXC Corp. or Kim’s family about such a deal.

The idea of acquiring Nexon, which currently has a market capitalization of nearly $16 billion, wouldn’t fit into Tencent’s strategy as its priority is investing in artificial intelligence, the person said.

Tencent, one of the world’s largest videogame publishers, has invested in game developers around the world. But apart from its multi-billion-dollar deal for Finland’s Supercell in 2016, Tencent has typically invested only hundreds of millions of dollars in many of its strategic deals. Its biggest recent deal was a $1.3 billion investment earlier this year for a quarter stake in a subsidiary of French game maker Ubisoft.

Tencent, which has an existing partnership to publish Nexon’s hits such as Dungeon & Fighter Mobile in China, has no need to own Nexon, the person said, adding that the two companies are discussing plans to develop Chinese content for Dungeon & Fighter Mobile given the game’s popularity in China.