Reports have emerged that China's Tencent is considering acquiring Nexon. Nexon stated, "We will not provide a separate position," rejecting an official response.
On the 12th, Chinese media Sina Finance reported, "Tencent is considering acquiring game company Nexon for $15 billion (approximately 20.3 trillion won)."
Bloomberg News also reported, "Tencent Holdings is reviewing the Nexon deal to strengthen its gaming business." Tencent has reportedly contacted the family of the late Kim Jung-ju to discuss the possibility of acquisition.
However, Bloomberg reported that the transaction structure has not yet been determined. This means it is unclear whether Tencent is pursuing equity in the holding company NXC or the business entity Nexon, and if so, how much equity it aims to acquire.
Bloomberg further reported, "Tencent had attempted to acquire Nexon in 2019, and this move arises while seeking a new entry into Korea." It added, "Tencent's subsidiary agreed to acquire about 10% equity of SM Entertainment at the end of May, coinciding with the relaxation of unofficial K-pop restrictions in mainland China."
Bloomberg explained, "Nexon and Tencent have collaborated in developing 'Dungeon & Fighter.' Tencent Games has been servicing Dungeon & Fighter and 'Dungeon & Fighter Mobile' in the Chinese market.
Currently, Nexon’s holding company NXC is chaired by Yoo Jeong-hyun, the widow of the late chairman Kim, who holds 33.35% equity. Their eldest daughter Kim Jung-min and younger daughter Kim Jung-yoon each own 17.16%. NXC holds 44.4% equity in Nexon along with investment firm NXMH BV based in Belgium.
The government holds 30.64% equity in NXC. After the death of Chairman Kim, Yoo and her two daughters inherited 1,963,000 shares of NXC, and the inheritance tax reported at that time was known to reach over 5 trillion won. As a result, the three women paid the inheritance tax by transferring NXC shares to the government. The equity value was assessed at 4.7 trillion won.
Subsequently, the government has attempted multiple times to auction the NXC equity it received, but all efforts have been unsuccessful. At the end of last year, it selected IBK Securities as the underwriter for the equity sale.
Meanwhile, as news of Tencent's acquisition review of Nexon spread, Nexon Games' stock price soared in the domestic market. It closed at 15,240 won, up 11.08% from the previous trading day, and increased by 23.1% in after-market trading.