On Monday, China’s antitrust regulator blocked Internet giant Tencent’s plan to merge Huya and Douyu, two major domestic video gaming platforms.
Tencent also recently withdrew its merger application for antitrust review and told the State Administration for Market Regulation it was unable to complete the resubmission of the merger review within 180 days after submitting the application for the first time.
Reportedly, Tencent failed to meet the requirements of the State Administration of Market Supervision regarding the company giving up exclusive content.
On October 12 last year, Huya and Douyu announced they had signed a merger agreement according to which Huya would acquire all issued shares of Douyu, including ordinary shares represented by American Depositary Receipts (ADS), through a share-for-share merger.
The shares and ADS issued by Douyu before the merger will be canceled. The company will become a subsidiary of Huya and will be delisted from NASDAQ.
According to iResearch’s Report on China’s Game Livestreaming Industry, the overall market size is expected to expand to nearly USD $6.19 billion in 2021. Tencent first announced plans to merge Huya and Douyu last year, aiming to streamline its stakes in the two companies. MobTech, a data company, estimated that the two companies have an 80% share of the market.
Huya and Douyu, ranked first and second respectively, are the most popular live video gaming websites in China, with users flocking to watch e-sports games and subscribing to check out professional gamers.
With 36.9% of share, Tencent is Huya’s largest shareholder and owns more than one-third of Douyu’s shares. Both platforms have listed in the United States, with a combined market value of $6 billion.