Tencent eyes pioneering UK rivals as it plans global expansion

The Chinese technology giant has set its sights on pioneering UK rivals because of the country’s talented entrepreneurs and impressive investment record

China’s biggest technology company, Tencent, has set its sights on pioneering UK rivals as it plans a global expansion. The technology giant is hunting for takeover targets in Britain because of the country’s talented entrepreneurs and impressive investment record, according to senior executives.

One of its top executives pointed to the billions of pounds of investment that had flowed in since the Brexit vote. China has made bolstering its high-tech industries a national priority and its moves to snap up foreign rivals has created unease in the West.

A former Tory defence minister, Sir Gerald Howarth said ministers need to identify those industries that it would be prudent to watch closely so that, if companies are going to be sold, they can look at what threat it might pose to Britain’s national interest, particularly, security.

Venture capital funds have invested £5 billion – more than double than any other European country – into UK tech firms since the referendum in 2016.

Tencent has already invested in British artificial intelligence start-up Medopad, partnered with Babylon Health and taken a minority stake in London-listed video games maker Frontier Development.

Most of its income comes from the lucrative video games business, which includes games such as Fortnite.

It also owns the hugely popular messaging app, Wechat, which has 1 billion active users, and allows people to pay for shopping, hail taxis, play games and find restaurants.

Tencent employs some 45,000 staff and has built an entertainment empire as well. Its Tencent Music business is more popular than Apple and Spotify’s rival services in China, while it has helped to finance Hollywood blockbusters such as Wonder Woman and Kong: Skull Island.

In the UK it helped jointly finance nature documentary Blue Planet 2 – watched by 220 million people worldwide – with the BBC.

A senior executive vice president at Tencent, Seng Yee Lau said the UK is in the top of its basket of considerations in its global merger acquisition market.

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