Tencent steps into the search engine field, Baidu faces challenges.
On July 27, Sogou announced that it had received a preliminary offer from Tencent, with Tencent intending to acquireSacquire remaining shares for USD 9/ADS.
Before this, Tencent was Sogou's largest shareholder, holding 39.2% of the total issued and 52.3% of the total voting power. Once the transaction is completed, Sogou will become a wholly-owned subsidiary of Tencent and delist from the NYSE.
In September 2013, Tencent invested USD 448 million in Sogou and merged Tencent's Soso and QQ Pinyin with Sogou's original search engine business.
Following Baidu, Sogou is the second largest search engine in China. Both regarded as the ‘BAT’ Internet giants, Baidu will face challenges from Tencent in its core business of search engine.
Affected by the acquisition news, Sogou’s shares climbed to USD 8.39 in early morning trade. And its market value was approximately USD 3 billion.
According to the documents, as of March 31, 2020, Sogou CEO Wang Xiaochuan owned 5.5% of Sogou with 0.7% of the voting power; Sohu Group holds 33.8% of Sogou and 44.1% of the total voting power.