THE Hong Kong-listed shares of Meituan plunged Thursday after Tencent Holdings said Wednesday it would distribute most of its stake worth US$20.3 billion in the food delivery firm to its shareholders in the form of a dividend.

Tencent, the world’s largest video game company and the operator of the WeChat messaging platform, said it will transfer 958.12 million shares in Meituan, representing approximately 90.9% of the Class B ordinary shares it held in Meituan. Tencent owns 17% of Meituan.

Tencent has been ramping up plans to reduce its extensive holdings across the world’s largest internet industry.

The decision marks a milestone in Tencent’s evolution from a sprawling internet empire with investments across much of China’s tech sphere to a more focused gaming and social media operator.

In December, Tencent announced the divestment of about 86% of its stake in JD.com Inc., worth US$16.4 billion, weakening its ties to China’s second-biggest e-commerce platform.

Apart from JD.com and Meituan, Tencent also holds stakes in e-commerce company Pinduoduo Inc., video platform Kuaishou, ride-hailing champion Didi, electric vehicle maker Tesla and streaming service Spotify.

And this year Tencent sold about US$3 billion worth of shares in Southeast Asia’s biggest internet company, Sea Ltd.

James Mitchell, Tencent’s chief strategy officer, said Tencent’s incentive to distribute its Meituan shares was to return capital to shareholders.

He said Meituan’s financial strength, industry positioning and its investment return profile were all reasons for the decision. (SD-Agencies)