Chinese gaming company Kunlun has reached a deal with United States government to sell Grindr, one of the world’s most popular gay dating apps, by June 2020, according to a filing to the Shenzhen Stock Market by Kunlun last night.
The company said that the agreement was reached with the US Treasury and Department of Justice last Thursday. Under the arrangement, Kunlun is banned from accessing sensitive data on Grindr, and cannot transfer that data to China. Grindr will halt its operations in China and keep its headquarters in the United States for daily operations and management. Three people appointed by the Committee on Foreign Investment in the United States (CFIUS) will join Grindr’s board of directors.
CFIUS is a government entity that vets overseas acquisitions of American businesses based on risks to American national security.
Under the agreement, the Beijing-based company will also need to offload its entire stake in Grindr by the end of June 2020. If Kunlun fails to sell Grindr before then, it will need to sign Grindr over to a trustee that oversees its sale.
“If the company sells Grindr’s stake in the future, it will lower the potential political and policy risks the company faces in its overseas operation,” Kunlun said in the filing. The company said it would conduct negotiations with potential buyers and finish the sale “as soon as possible.”
Kunlun became Grindr’s sole owner through a series of acquisitions. It bought a 61.53% stake in Grindr for USD 93 million in 2016 and acquired the remaining shares for USD 152 million in 2018.
The prolonged national security review process—and now the necessity of spinning off the business—has dashed Kunlun’s hopes of listing Grindr on the stock market in the US.