Grindr's Chinese owner says to sell social media app for $608 million

[March 06, 2020]  By Echo Wang and Chibuike Oguh

(Reuters) - Chinese gaming company Beijing Kunlun Tech Co Ltd <300418.SZ> said on Friday that it has agreed to sell Grindr LLC, a popular gay dating app it acquired in 2016, for about $608.5 million.

The deal comes after a U.S. government panel set a June 2020 deadline to sell the app. The panel, dubbed the Committee on Foreign Investment in the United States (CFIUS), has not disclosed its concerns about Kunlun's ownership of Grindr.

However, the United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves U.S. military or intelligence personnel.

Kunlun said it agreed to sell its 98.59% stake in Grindr to San Vicente Acquisition LLC.

Reuters reported earlier on Friday that Kunlun was close to signing a sales deal, citing people familiar with the matter.

One of the investors in the group that is nearing a deal to acquire Grindr is James Lu, a former executive at Chinese search engine giant Baidu <BIDU.O>, three of the sources said. The identity of the other investors in the consortium could not immediately be learned.

Grindr app is seen on a mobile phone in this photo illustration taken in Shanghai, China March 28, 2019. REUTERS/Aly Song/File Photo

Kunlun is one of China's largest mobile gaming companies. It acquired a majority stake in Grindr in 2016 for $93 million and bought out the remainder of the company in 2018. It did so without submitting the transactions for CFIUS review.

Kunlun's control of Grindr has fueled concerns among privacy advocates in the United States. Democratic U.S. Senators Edward Markey and Richard Blumenthal sent a letter to Grindr in 2018 demanding answers about how the app would protect users’ privacy under its Chinese owner.

Reuters reported last year that Kunlun had given some Beijing-based engineers access to the personal information of millions of Americans, including private messages and HIV status.

(Reporting by Echo Wang and Chibuike Oguh in New York; Editing by Muralikumar Anantharaman, Robert Birsel)

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