Meta prepares to undo Manus acquisition after China ban, WSJ reports

April 27 (Reuters) - Meta ‌Platforms is preparing ​to ​unwind its acquisition of artificial intelligence startup Manus after China blocked the deal on national ‌security grounds, the Wall Street Journal reported on ⁠Monday, citing people familiar with the matter.

Earlier on Monday, China ordered ‌the U.S. tech major to ‌unwind its $2 billion-plus acquisition of Manus, as Beijing tightens scrutiny of U.S. investment in domestic startups developing ​frontier technologies.

According to the Journal report, the Singapore-based AI startup's investors, which include venture capital firm Benchmark, have ⁠already received their returns.

Meanwhile, several former Manus investors in Asia, including Tencent, ​HSG and ZhenFund, are planning to cooperate if Meta proceeds with unwinding the deal, the report ​said.

Beijing has given the two ‌companies a preliminary deadline of several weeks to reverse the transaction and fully restore Manus's ⁠Chinese assets to their original state, the Journal reported, adding that this would include removing any data or technology previously ⁠transferred from Meta.

Chinese regulators have also considered imposing penalties on Manus ​and Meta if the deal cannot be fully rescinded, the report added.

Meta and Manus did not immediately respond to a Reuters' request ‌for comment.

The move comes weeks ahead of a planned mid-May summit in Beijing between ‌U.S. President Donald Trump and Chinese President Xi Jinping.

China's commerce ⁠ministry announced an investigation ‌into the sale ​in January, days after Meta completed the acquisition.

(Reporting by Akanksha Khushi in Bengaluru; Editing by Sumana ‌Nandy)

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