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Tencent-Backed Livestreaming Companies Huya and DouYu Enter into Merger Agreement

October 13, 2020 4:23 am

Beijing (PingWest)—Huya today announced a plan to merge with DouYu, which is expected to delist from the Nasdaq in the coming months.

Before the announcement, Huya was valued at about $5.8 billion on the New York Stock Exchange while Douyu was valued at about $4.7 billion. Post merger, Huya and DouYu shareholders will each hold approximately 50% shares of the combined company on a fully diluted basis.

Tencent owns about 36.9% of share capital of Huya and 50.9% of total voting power through its affiliates. The tech giant also the largest shareholder of DouYu, holding about 38% of the share capital and voting power. Tencent's voting power in the new company will reach 67.5%.

The merger brings together China’s two largest video game live-streaming platforms with a combined 300 million users. According to iResearch, there are 340 million users in China’s game live-streaming market, which is projected to generate 23.6 billion yuan ($3.5 billion) in revenue this year.

Tencent may be the biggest beneficiary of this merger, because this merger further consolidates its leading position in e-sports and gaming. As the world’s largest gaming company by revenue, Tencent has developed and published some of the most lucrative mobile games in the world, including PUBG Mobile and Honor of Kings.