Sogou completes the merger with Tencent
On September 23, Sogou announced that it has completed the merger with Tencent, and Sogou will become an indirect wholly-owned subsidiary of Tencent Holdings. Sogou will complete its delisting and continue to operate as a surviving company.
This is the first time Sogou has disclosed details of the merger since the State Administration for Market Regulation (SAMR) announced its unconditional approval of Tencent’s acquisition of Sogou’s shares on July 13th.
According to Sogou’s financial report, in Q2’21, Sogou’s total revenue was $147.5 million USD, a year-on-year decrease of 44%.
The net profit attributable to Sogou was US$39.9 million, compared to the net loss of $8.5 million USD in the same period in 2020.
Under non-US GAAP, the net profit attributable to Sogou was $41.4 million USD, while the net loss for the same period in 2020 was $5.5 million USD.
Sogou was established in August 2004. Prior to that, it was a subsidiary of Sohu. Its main business includes Sogou search, Sogou input method, email, etc.
In September 2013, Tencent invested $448 million USD in Sogou and merged its search engine business “Tencent SOSO” and other related assets into Sogou. After the transaction was completed, Tencent obtained a 36.5% share of Sogou’s diluted shares.
After the merger of Sogou and Tencent, according to the plan, Tencent Kandian will absorb most of Sogou’s business and employees. After the absorption, the total number of Tencent Kandian employees will exceed 4000, making it the second-largest business within PCG, second only to OVB (online video business unit).
Most of Sogou’s businesses and products will be shut down and integrated into Tencent Kandian. The docking procedure between the two parties has been ongoing for several months.
