Huya and DouYu Plan Merger, Tencent Will Control 67.5% of Voting Power – The Esports Observer|home of essential esports business news and insights


Tencent’s proposed merger of Chinese live-streaming platforms Huya and DouYu was set into motion on Monday when both companies announced that they have entered into an agreement and plan of merger. The business combination is expected to close during the first half of 2021. 

The merger combines China’s two largest gaming and esports focused live-streaming platforms with Huya being the surviving entity. In their last earnings reports, Huya and DouYu reported monthly average users of 169M and 165M, respectively. Once the merger is completed, the current Huya CEO Rongjie Dong and current DouYu CEO Shaojie Chen will lead the new entity as co-CEOs.

Prior to the announcement at market close on Friday, New York Stock Exchange (NYSE) traded Huya had a market capitalization of $5.74B USD and Nasdaq Global Select Market (NasdaqGS) traded DouYu International had a market capitalization of $5.08B. According to the companies investor relations information, Huya will acquire all outstanding shares of DouYu in a stock-for-stock merger at an exchange ratio of 0.73 shares of Huya per share of DouYu. The merger’s completion will result in DouYu becoming a privately-held and wholly-owned subsidiary of Huya, therefore, being delisted from the NasdaqGS.

Tencent separately entered into two share transfer agreements with Huya CEO Rongjie Dong and DouYu CEO Shaojie Chen. Immediately before the closing of the merger, Tencent will purchase 1,970,804 Huya shares from Dong and 3,703,704 DouYu shares from Chen. Following the business combination, Huya’s parent company Tencent Holdings will control 67.5% of the new company’s voting power. 

Both Huya and DouYu boards of directors approved a cash dividend to be paid to shareholders on or around the merger’s closing date. Huya shareholders will receive a dividend payment in an aggregate amount of $200M, while DouYu shareholders will be paid an aggregate amount of $60M.

Furthermore, Tencent entered into a $500M reassignment agreement with DouYu. Tencent will be compensated to integrate its game live-streaming business called Penguin e-Sports with the combined business of Huya and DouYu upon the merger.



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