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Tencent's $1.3 billion Sumo deal is being investigated by the US government


Tencent Holdings' $1.27 billion takeover of Sumo Group is being investigated by a US national security panel, the British videogame maker said on Friday, in a possible setback for the Chinese internet giant.

Tencent agreed to offer undertakings to the Committee on Foreign Investment in the United States (CFIUS), which evaluates deals to ensure they do not jeopardize national security, according to Sumo, which has studios in the United States and four other countries.

Under former President Donald Trump, the secretive task force, which is also investigating the US sale of video-sharing app TikTok, increased its scrutiny of Chinese deals.

Tencent reached an agreement with Sumo in July, just days after China's market regulator rejected its plans to merge Huya and DouYu, two videogame streaming sites, on antitrust grounds.

Sumo and Tencent are working with the CFIUS to get the acquisition approved before the end of the year, according to the British firm.

Sheffield-based Microsoft's XBOX game studios, Apple, and Alphabet's Google are among Sumo's clients and partners.

Sumo's racing and snooker games would be combined with Tencent's more high-profile game portfolio, which includes the mobile version of "Call of Duty."