TAIPEI (Taiwan News) – The New York Based media giant, Viacom, may be preparing to drop a majority of its stake of its China operations, including several of its popular TV channels in China, like MTV and Nickelodeon, according to recent reports.
A deal with an unnamed Chinese entity is reportedly being negotiated, with MarketWatch speculating that getting rid of the China operations may be an effort to reduce regulatory risk amid market uncertainty and heightened tension between Beijing and Washington.
Bloomberg reports that Viacom has had difficulty in recent years to effectively scale its operations and investments in the large country. Additionally, China’s media censors have also begun to increasingly scrutinize foreign-produced content in recent years.
By selling a majority of shares, but maintaining some stake in the brand, the company would be able to continue to see profits.
Many foreign companies in China are also reportedly concerned about the turn towards nationalism, encouraged by the central state, which could inflict sustained losses on foreign brands operating there.
Viacom is just the latest large U.S. firm with investments and operations in China that appear to be under pressure to reconsider business ventures in the country, as the Chinese economy appears set to for a continued economic downturn.
MarketWatch also notes that large U.S. firms such as McDonald's and Hewlett-Packard have made similar divestments in recent years.