China's State Administration for Market Regulation (SAMR) approved on Tuesday Tencent's proposal to take U.S.- listed search engine platform Sogou (NYSE: SOGO) private in a $3.5 billion deal.
The deal was first announced in September. Under the deal, Sogou will merge with a subsidiary of tech giant Tencent Holdings (HKEX: 00700; OTC: TCEHY). Sohu, which previously held a 33% stake in Sogou, would receive $1.18 billion in cash from the Chinese tech conglomerate.
Goldman Sachs( Asia) is serving as the financial adviser to Tencent, while China Renaissance is acting as the financial adviser to Sohu.
Sogou has been a disappointment for shareholders since its IPO three years back. The company priced its shares at $13 apiece and raised $585 million in November 2017. Since, it has never reached above IPO level.
Washington has threatened to delist Chinese firms by 2021 if they do not comply with U.S. auditing standards, which could explain the buyout binge.
Shares of Sogou increased more than 2% today to close at $8.9 per share in New York.
The approval for the acquisition comes days after the SAMR officially halted the proposed merger of HUYA Inc. (NYSE: HUYA) and DouYu International Holdings Limited (NASDAQ:DOYU), two of the country's largest game live streaming platforms.
Today's announcement marks a sign of big relief for the tech industry in China, where big tech companies have faced numerous antitrust probes and investigations.