Tencent Holdings (HKSE: 0700) is pushing forward a combination of China’s biggest gaming livestreaming platforms Douyu (NASDAQ:DOYU) and Huya (NYSE: HUYA), proposing a conversion of all Douyu shares into Huya stock, according to the preliminary non-binding proposal letter the two companies received on August 10.
Meanwhile, Huya’s parent company JOYY Inc has entered into a definitive share transfer agreement with a Tencent subsidiary to transfer 30 million Class B ordinary shares of Huya to Tencent at a price of USD 810 million. Tencent currently holds a 38% stake of Douyu and 37% of Huya. Following the transaction, Tencent’s shareholding in Huya will increase to 51%.
The deal could see a combined online giant with more than 300 million users and a market value of USD 10 billion. Douyu and Huya stock opened significantly higher on Monday after the announcement, but later tumbled during the session. Douyu shares declined 8.51% to USD 13.97, while Huya closed at USD 24.04, down 9.93%. Tencent stocks climbed 3.09% to HKD 517.5 (USD 66.77) on Tuesday morning.
This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.