Search Engine Sogou Joins Exodus of Chinese Firms From Wall Street as Tencent Takes It Private

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By Ding Yi / Sep 30, 2020 11:59 AM / Finance

Photo: VCG

New York Stock Exchange-listed Chinese search engine Sogou has signed a deal to be privatized by Tencent at a healthy premium, becoming the latest Chinese firm to leave U.S. bourses amid tensions between Washington and Beijing.

The purchase price of $9 per share represents a premium of 56.5% to Sogou’s closing price on July 24, the last trading day before Tencent sent a preliminary offer to take it private, Sogou parent Sohu.com said in a statement on Tuesday.

Sohu.com said that it will receive about $1.18 billion in cash from Tencent as part of the deal, which is expected to close in the fourth quarter of 2020.

If completed, the transaction will result in Sogou becoming an indirectly wholly owned subsidiary of Tencent, and Sogou’s American depositary shares (ADSs) will be delisted, according to the statement.

Sogou’s shares closed up 2.31% at $8.87 on Tuesday, still well below their initial public offering (IPO) price of $13 per ADS in 2017.

Currently, Tencent owns a 39.2% of Sogou, while Sohu.com has 33.8%. Sohu.com founder and CEO Charles Zhang owns 6.4%.

The announcement comes a day after Nasdaq-listed Chinese internet giant Sina, one of China’s oldest listed internet companies and owner of the Twitter-like app Weibo, said that it had agreed to go private in a $2.59 billion deal.

Contact reporter Ding Yi (yiding@caixin.com)

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