Meta Stock Slips Premarket: $2.5B Manus Deal Is Reportedly Off After Beijing Roadblock

• Beijing has blocked Meta’s $2.5 Manus deal on national security grounds, China’s NDRC said in a notice.
• A Meta spokesperson said the deal is fully compliant with applicable law and the company would seek to secure a resolution. 
• Stocktwits sentiment for META remained ‘bearish’ as investors steadied their positions ahead of the social media company’s quarterly report due Wednesday.

Meta Platforms, Inc.’s shares fell nearly 0.5% in early premarket trading on Tuesday. After news that Beijing had blocked the company’s acquisition of South Asian AI startup Manus, a new report said that the social media giant is moving to unwind the deal.

Meta acquired Manus, which helps enterprises build AI agents, for $2.5 billion in December last year and quickly integrated its technology into its systems. Manus is headquartered in Singapore but has its origins in China.

Meta is now preparing to unwind the acquisition, the Journal reported on Monday, citing people familiar with the matter. Earlier in the day, China said it was blocking the deal on national security grounds, according to a notice from the National Development and Reform Commission (NDRC), China’s top economic planner.

If true, unwinding the Manus deal would slow Meta’s push in the fast-moving agentic AI space. It also presents complications as around 100 Manus employees had already moved into Meta’s Singapore offices as of March, with founders taking on executive roles. 

“The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry,” a spokesperson at Meta told TechCrunch. Manus has yet to comment.

According to the Journal’s reporting, Beijing has handed Meta and Manus a preliminary deadline of several weeks to unwind the deal and fully restore Manus’s Chinese assets to their original state. 

This includes stripping any previously transferred data or technology from Meta. Beijing has also considered imposing penalties on Manus and Meta if the deal couldn’t be fully rescinded.

Several former Manus investors in Asia, including Tencent, HSG and ZhenFund, have planned to cooperate if Meta goes ahead to unwind the deal, some of the people said, according to the report.

To be sure, Beijing had launched a review shortly after the deal was announced and, in March, called in Manus co-founders Xiao Hong and Ji Yichao for a discussion. The executives were later told not to leave the country pending the investigation, it was reported at the time.

Manus’ founders previously established its parent company, Butterfly Effect, in Beijing in 2022 before relocating to Singapore. 

On Stocktwits, the retail sentiment for META was ‘bearish’ early Tuesday. Investors were broadly focused on the company’s quarterly report due on Wednesday. As of the last close, META stock is up 3% year-to-date.

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