Guangzhou-based Chinese live-streaming platform Huya and its Wuhan-based competitor DouYu today announced the termination of their merger agreement. The announcement follows a decision published by China’s antitrust authority, the State Administration for Market Regulation on July 10, which prohibited the proposed merger between the two live streaming companies following an antitrust review.
Tencent, a Chinese conglomerate that is heavily invested in esports and gaming assets such as League of Legends maker Riot Games and Fortnite creator Epic Games, initiated the merger plans that were signed on Oct. 12 last year to streamline its investments in gaming-focused live-streaming platforms. Currently, Huya is a non-wholly owned subsidiary of Tencent and listed on the New York Stock Exchange, while Tencent owns more than a third of DouYu’s shares, which are traded on the NasdaqGS market. In addition to DouYu’s planned merger with and into Huya, Tencent’s game live-streaming business called Penguin e-Sports was supposed to be added to the new company through a $500 million USD reassignment agreement with DouYu.
In consequence of the merger’s termination, the boards of directors of Huya and DouYu canceled the approval of cash dividend payments tied to the date of the closing of the merger of $200 million and $60 million, respectively.
Additionally, Tencent terminated its share transfer agreements with Huya CEO Rongjie Dong and DouYu CEO Shaojie Chen whereby Tencent would have purchased 1,970,804 Huya shares from Dong and 3,703,704 DouYu shares from Chen to obtain a controlling 67.5% stake in the new company.
(Photo : Pandaly)