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Tencent Hands Out $16 Billion of JD Stock in Crackdown-Led Shift

  • Shares of JD tumble in Hong Kong while Tencent jumps
  • The firms will continue a “mutually beneficial” partnership
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WATCH: Tencent plans to distribute nearly its entire stake in JD to its investors as dividend. Bloomberg Intelligence’s Kanterman discusses what the move means.Source: Bloomberg
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Tencent Holdings Ltd. plans to distribute more than $16 billion of Inc. shares as a one-time dividend, a surprise retreat from the Chinese e-commerce firm after Beijing moved to curtail the power of tech monopolies.

The unexpected move to divest most of its stake in China’s No. 2 online retailer comes as Beijing punishes the country’s tech giants for anti-competitive behavior, including maintaining closed ecosystems that favor certain companies at the expense of others. Tencent’s handout may buy goodwill with the government, which has pushed for the dismantling of barriers and for tech firms to share the wealth. As part of the deal, Tencent President Martin Lau will exit JD’s board effective Thursday.