NYSE-listed video game livestreaming platform Huya Inc. announced on Oct. 12 to buy DouYu International Holdings Ltd., which is expected to delist from the Nasdaq, creating a $10 billion livestream mammoth.
As the two largest video game livestreaming platforms in the Chinese market, Douyu and Huya together have 300 million users, taking up the majority of China’s estimated 340 million game live-streaming viewers.
Additionally, the merger will create a combined market share of more than 80% in China, according to data from MobTech.
Chinese tech giant Tencent, Huya’s biggest shareholder, also owns over a third of Douyu. As the world’s biggest gaming company by revenue, Tencent holds the majority of the voting power. Despite owning lucrative mobile games including PUBG Mobile and Honour of Kings, Tencent made a significant stride in the esports industry overnight.
Huya previously had a valuation of approximately $5.8 billion on the New York Stock Exchange and Douyu at about $4.7 billion. After the merger, shareholders of each company will hold around 50% of the combined company.
In the merger, Douyu will receive 0.730 American depositary shares (ADS) of Huya, representing a premium of 34.5% to Douyu’s last close of $14 and valuing it at nearly $6 billion, according to Reuters calculation based on 317.5 million shares.
Tencent will possess voting power of 67.5% in the new company after the stock-for-stock merger.
Rongjie Dong, Huya’s current CEO, and Shaojie Chen, Douyu’s current CEO, will become co-CEOs of the combined company. Meanwhile, Chen will join Huya’s board of directors as the 10th member.