Tencent Confirms Merger of DouYu and Huya, Creating a $10 Billion Super Platform
Tencent has officially announced its plans to merge DouYu and Huya, China’s two largest live streaming platforms, into a single super platform. This merger would result in a platform worth over $10 billion, boasting more than 300 million users across all active regions.
Massive Merger Creates a Mega Twitch
The confirmation of this merger has been met with excitement in the gaming community. Analyst Daniel Ahmad compared the resulting platform to a “mega Twitch.” Furthermore, Tencent aims to finalize this merger by September 9, which indicates the company’s commitment to this strategic move.
Significant Stake in Both Companies
Tencent already holds significant stakes in both Huya and DouYu, with majority voting power in each company. Earlier this year, the media giant purchased a $262 million stake in Huya, solidifying its presence in China’s thriving streaming market.
Huya and DouYu Control Over 80% of Chinese Online Game Streaming Market
Huya currently holds the number one spot as the leading online gaming platform in China, closely followed by DouYu. Together, these two companies control more than 80% of the Chinese market for online game streaming, making this merger a significant consolidation of power.
The stock-for-stock merger proposal suggests that Huya or its subsidiaries would acquire the remaining outstanding shares of DouYu. However, it’s important to note that the proposal is not a binding agreement, but rather a formal proposal at this stage.
Despite the merger, both Huya and DouYu will continue to operate as individual brands and platforms. Additionally, they will maintain a close connection with Tencent’s own esports platform, eGame.
This merger comes as a timely triumph for Tencent, particularly after the United States’ recent restrictions on transactions related to WeChat and TikTok. Tencent faced a significant stock decline of over $66 billion immediately following the announcement of the executive order.