Korean games industry slams Tencent’s Nexon pursuit as threat to national security
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Tencent is exploring a potential deal to acquire Nexon as it seeks to strengthen its games business in Korea.
As reported by Bloomberg, the Chinese publishing giant has approached the family of Nexon’s late founder Kim Jung-ju to discuss a possible purchase. Kim’s family is consulting advisers and exploring their options.
Off the news of a possible deal the Korean games industry has protested against the acquisition, accusing Tencent of trying to buy its way into the Korean market. While Nexon floated on Japan’s stock exchange, its roots are firmly in South Korea’s industry.
“Tencent’s attempt to acquire Nexon is not just a simple transaction between private companies — it is a strategic move to dominate one of the most important industries in Korea,” said the Korea Game Society in a statement via korea joongAng daily.
“This is a matter of national security that the government should not just neglect on the pretense of neutrality.”
The Korea Game Society added: “Amid the prevalent anti-Chinese sentiment in the Korean society, Tencent’s moves not only run counter to the people’s general sentiments, but they could also shake the diplomatic ties between the two countries, which the governments have been working hard to rebuild.”
Rising uncertainty
It remains uncertain whether NXC is open to selling its Nexon stake and there’s no guarantee Tencent’s talks will result in a deal, sources said.
Kim Jung-ju’s family holds 44.4% of Nexon through NXC and wholly owned subsidiary NXMH, with his partner and daughters owning about 67.6% of NXC.
After Kim Jung-ju’s death in 2022, his family inherited his NXC stake and gave part of it to the Korean government to pay inheritance taxes.
They also sold some shares back to NXC for $478 million. Nexon’s stock surged 8.4% last week, raising its value to $16.3 billion.
Tencent already holds significant stakes in major Korean companies, including 17.5% of Netmarble, 13.6% of Krafton, 20.7% of Webzen, and 40% of Shift Up. It also recently acquired 9.7% of SM Entertainment from HYBE for $176.5m.
Want to learn more about the Chinese games market and wider Asia industry? Pocket Gamer Connects is heading to Shanghai on July 30th. Visit the website for more details.
