Worry: Tencent’s interest in UK firms is likely to prompt concern from security experts
China’s biggest technology company has set its sights on pioneering UK rivals as it plots a global expansion.
Tencent is hunting for takeover targets in Britain because of the country’s talented entrepreneurs and impressive investment record, according to senior figures.
And one of its top executives pointed to the billions of pounds of investment that had flowed in since the Brexit vote. However its interest in UK firms is likely to prompt concern from security experts.
China has made bolstering its high-tech industries a national priority, with its moves to snap up foreign rivals causing unease in the West.
Sir Gerald Howarth, a former Tory defence minister, said: ‘Ministers need to identify those industries that it would be prudent to watch closely so that, if companies are going to be sold, they can look at what threat it might pose to Britain’s national interest – and particularly security.’
Since the referendum in 2016, £5 billion has been ploughed into UK tech firms by venture capital funds – more than double any other European country.
Tencent has already invested in British artificial intelligence start-up Medopad, partnered with Babylon Health and taken a minority stake in London-listed video games maker Frontier Development.
Though largely unknown to most Western consumers, Tencent is China’s second most-valuable company.
Most of its income comes from the lucrative video games business, where it distributes many Western hits such as Fortnite in the country.
But it also owns Wechat, the hugely-popular Chinese messaging app – that also allows people to pay for shopping, hail taxis, play games and find restaurants. The app has 1 billion active users, more than 70 per cent of China’s population.
Tencent employs some 45,000 staff and has built an entertainment empire as well. Its Tencent Music business is more popular than Apple and Spotify’s rival services in China, while it has helped to finance Hollywood blockbusters such as Wonder Woman and Kong: Skull Island.
In the UK it helped jointly finance nature documentary Blue Planet 2 – watched by 220 million people worldwide – with the BBC.
Seng Yee Lau, a senior executive vice president at Tencent, said: ‘The UK is in the top of our basket of considerations in our global merger acquisition market.’