Two U.S.-listed Chinese Internet companies are delisting from New York exchanges and going private in multibillion-dollar deals, joining a growing number of Chinese companies distancing themselves from U.S. exchanges as tensions flare between the U.S. and China.
Nasdaq-listed Sina Corp., the owner of popular Chinese microblogging site Weibo, will go private in a $2.59 billion deal with Beijing-based New Wave Holdings, while web search company Sogou Inc. will go private in a $3.5 billion deal with Chinese tech giant Tencent Holdings. (Tencent is already a major Sogou shareholder.)
Sina debuted on the Nasdaq in 2000. Sogou went public on the New York Stock Exchange in 2017. The Sogou-Tencent deal is expected to close in the fourth quarter of the year, Sogou said in a press release. Sina expects to go private in the first quarter of 2021, it said in a release.
Sogou and Sina didn’t immediately respond to requests for comment.
Sogou and Sina join an expanding group of U.S.-listed Chinese companies that have chosen to delist from the U.S. or pursue secondary listings in Hong Kong and mainland China amid an increasingly stringent regulatory climate for Chinese firms in U.S. capital markets.
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Two NYSE-listed Chinese firms, car-listings site Bitauto and online classifieds site 58.com, announced deals to go private in June; semiconductor giant SMIC delisted from the NYSE last year and went public in Shanghai in July. And some of the biggest offerings in Hong Kong and Shanghai so far this year were secondary offerings of U.S.-listed Chinese companies, including e-commerce firm JD.com, gaming company NetEase, and restaurant giant Yum China.
The Trump administration’s efforts to ban TikTok and WeChat, two Chinese-owned apps; unanimous Senate support of a bill giving the U.S. more authority to delist Chinese companies; and a friendlier regulatory climate in Hong Kong and mainland China capital markets have increasingly driven Chinese tech firms to choose listings closer to home.
Chinese companies in politically sensitive industries are also facing heightened scrutiny from the U.S. government. SMIC, which delisted from the NYSE in 2019, saw its Hong Kong shares drop this week after Washington announced it was imposing export restrictions on the Chinese firm.
U.S.-China relations may fray further in the run-up to the U.S. presidential election in November, since some experts argue that President Donald Trump will double down on his administration’s tough-on-China approach to boost his chances at reelection. Other experts note that U.S.-China relations have devolved to such a degree that even a Biden win will not improve them.
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