According to recent reports publishes by Reuters and other media outlets, China’s antitrust regulator is unlikely to approve Baidu’s acquisition of Joy Inc.’s video-based home live streaming business YY Live for $3.6 billion. The acquisition will be delayed until the application expires or one of the two companies withdraw their applications.
As a result, Baidu‘s plan to further expand its video game live-streaming business through the acquisition of YY Live may fail. As of the time of this article’s publication, Baidu said that it had not received such news from Chinese regulators.
Baidu announced in November last year that it would acquire YY Live for with about $3.6 billion, and expected to be completed in the first half of 2021. After the transaction is completed, YY Live will be retained, but its content, technology, and domestic live-streaming team will be provided to Baidu.
The State Administration for Market Regulation said in a report in early September that it was conducting an antitrust review of 11 company transactions, including the Baidu-YY deal. Two months ago, on the grounds of anti-monopoly practices,the regulator blocked Tencent‘s plan to spend $5.3 billion to merge Huya and Douyu.
As for the reason why Baidu planned to acquire YY Live, Baidu‘s CEO Robin Li said at the performance meeting: “YY Live has a very loyal user group and a large number of content creators, which are difficult for Baidu to achieve at the current time.”
YY Live’s platform differs from other popular live commerce platforms in that hosts of this platform are rewarded by interacting with users through singing, dancing and playing games, which is currently seeing increased regulatory scrutiny.
The development plan of Baidu‘s live-streaming service is completely different from YY Live. Baidu‘s plan includes two parts, one is educational live-streaming, and the other is live commerce. Baidu‘s live-streaming platform is positioned as a placeto share new knowledge and experience.
Since the beginning of this year, many mid-level technical leaders in YY Live have resigned. The loss of integral employees is one of the important issues in this merger.
On August 17th, Joy Inc. announced that the company and Baidu had agreed to extend the deadline of the transaction to the date agreed by both parties. According to people familiar with the matter, the delay was due to the fact that the regulatory approval was still pending.