US senator wants Tencent out of Paramount-Skydance deal

China’s Tencent (0700) shouldn’t be allowed to own a piece of Paramount Global following the US company’s merger with Skydance Media, the head of the US Senate’s Intelligence Committee said in a letter Thursday to the Treasury Department.

Senator Tom Cotton, an Arkansas Republican, requested a security review of the deal in a letter to Treasury Secretary Scott Bessent, calling the transaction “troubling.”

Tencent reportedly owns up to 10 percent of Skydance “and likely will hold some ownership of the new company post-merger,” Cotton wrote. 

The parties involved in the merger have said Tencent will hold nonvoting, publicly traded shares in the new company and have no ability to influence management.

Paramount’s properties include CBS, the most-watched broadcast network, and the Paramount+ streaming service, which has 71.9 million subscribers, Cotton wrote. 

“This national security risk is unacceptable,” Cotton said.

The Committee on Foreign Investment in the US, which Bessent now supervises, should investigate the matter and “take remedial steps” to ensure that Tencent doesn’t participate in the transaction, according to the letter. 

Senator Mark Warner, a Virginia Democrat and vice chairman of Cotton’s committee, previously called for the government to look at the deal, as did Representative John Moolenaar, chairman of the House China Select Committee. They cited Tencent’s recent inclusion on a US military blacklist. 

The committee has the power to unilaterally investigate pending or already completed deals when a foreign entity could hold any stake in a US company.

The intelligence community has reason to believe the merger is dangerous with Tencent’s participation, Cotton said. Along with the letter, he said he shared classified materials “that demonstrate the national security implications of this merger.”

BLOOMBERG