Sogou Inc., the subsidiary of Chinese company Sohu Inc. specializing in web search, has agreed to go private in an all cash deal with Tencent Holdings valuing the company at $3.5 billion. Tencent Holdings Ltd., which is also Chinese, is a multinational technology conglomerate headquartered in Shenzhen.
Many Chinese companies trading on US stock exchanges are considering going private via deals or by returning to equity markets closer to home as the tensions between the two biggest economies rises. Just one day ago, Weibo parent company Sina announced the decision to delist from US exchanges in a $2.6 billion deal.
Tencent is offering $9 per share of Sogou, a 56.5% premium on Sogou's close on July 24th (the last trading day before the company sent out a preliminary offer to take it private). Sohu will receive $1.8 billion in cash since Tencent currently owns 39.2% stake in Sogou and the deal is expected to close in the fourth quarter of 2020.