China's Internet Firm Sogou Receives Privatization Offer from Tencent

July 27, 2020 10:13 pm

Beijing (PingWest)—Sogou (NYSE: SOGO), a Chinese search engine, announced today that its board of directors has received a proposal from Tencent to acquire its remaining outstanding shares for $9 apiece.

The cash offer is 56.5% higher than Sogou's close of its US-listed shares last Friday.

Tencent, the Chinese tech giant, owns approximately 39.2% of Sogou's issued and outstanding shares, while Sohu, parent company of Sogou, holds 33.44%.

In 2013, Sogou secured an investment of $448 million from Tencent. The giant chose Sogou as the default search engine for its instant messaging app WeChat to compete with Baidu, the number one search engine in China.

If the proposed transaction completed, Sogou will become a privately-held, indirect wholly-owned subsidiary of Tencent; Sogou's ADSs would be delisted from the New York Stock Exchange, and Sohu would no longer have an interest in Sogou. 

Sogou was established in 2004 and went public in the US in November 2017. It operates the second-largest search engine in China and mainly generates revenue through search advertising services.