Chinese drone developer Dajiang Innovations Science and Technology Co, better known as DJI, has denied rumors about the purchase of rival ZEROTECH.
The rumors demonstrate that the drone market is slowing, media reports said on Thursday.
DJI, with a market share of 52 percent as of the third quarter of 2016, will not buy ZEROTECH, a Beijing-based developer of smart drones and smart unmanned aerial vehicles (UAVs), which had a 24.3 percent market share, domestic news site thepaper.cn reported.
If the deal did occur, DJI would account for 76.3 percent of China's drone market, which might spark antitrust investigations, the report noted.
There is zero possibility that ZEROTECH will be purchased by DJI, Yang Jianjun, the company's CEO, was quoted as saying in the media report.
New shareholders in ZEROTECH include Samsung Venture Investment Corp, a venture capital firm within the Samsung Group that focuses on early-stage start-ups. ZEROTECH has not disclosed the amount of this round of financing.
ZEROTECH has been facing managerial difficulties in recent years. In December 2016, it said that it would lay off 25 percent of the total staff.
Market speculation about a takeover reflects the sluggish drone sector, which has slowed markedly since the second half of 2016. Another domestic drone developer Ehang laid off 70 employees while foreign counterpart Lily has been shut down.
Recently, tightened regulation of UAVs has also affected the drone market, and DJI has said that its revenues fell slightly.
However, small drones are expected to become a major growth engine in the future, especially as they are customized. Subsidies may also play a major role.
