China's top market regulator said on Saturday it has banned Tencent's merger of the country's most popular video game streamers, Huya and DouYu, after an anti-monopoly investigation.

The State Administration for Market Regulation (SAMR) said the merger would strengthen Tencent's dominant position in the video game streaming market and may eliminate market competition.

Tencent, Huya's biggest shareholder with 36.9 percent and also owns over a third of DouYu, first announced the merger plan in October, 2020. The deal fell under investigation at the beginning of this year.

According to SAMR, Tencent has more than 40 percent market share in the online game operations sector, ranking first in China. Also, Huya and DouYu totaling have more than 70 percent market share in the video game streaming industry, said SAMR.

The additional commitments proposed by Tencent cannot effectively resolve the fair competition concerns, SAMR added.

To the announcement, Tencent said in a statement it will abide by the decision and comply with regulatory requirements. 

It will operate per applicable laws and regulations and fulfill its social responsibilities, said Tencent.