In the midst of another week of COVID-19 quarantine, the music industry can’t stop talking about live streaming – but, over in China, Tencent’s doing a lot more than talking.
On Friday (April 3), Linen Investment Limited – a wholly-owned subsidiary of China-based Tencent Holdings Limited – revealed that it is acquiring a controlling stake in Twitch rival Huya from NASDAQ-listed social media platform JOYY, for approximately $262.6 million in cash.
This transaction follows last month’s news that a Tencent-led consortium has completed a $3.4bn acquisition of 10% of Universal Music Group.
Huya, which claims to be the biggest video game live streaming platform in China, listed on the New York Stock Exchange in May 2018.
In Q4 2019, Huya Live had 150.2m monthly active users (MAUs), which was up 29% year-over-year. Huya also had 61.6m mobile MAUs in Q4 2019.
According to the press release announcing Friday’s transaction, Tencent exercised its option to acquire 16,523,819 Class B ordinary shares and is now the largest shareholder of Huya, having increased its voting power to 50.1% on a fully-diluted basis, or 50.9% calculated based on the total issued and outstanding shares of Huya.
Huya continues to operate independently and remains headquartered in Guangzhou, and its existing management team continues to be responsible for all aspects of business management and operations of the Company.
Following the announcement of the deal, Lingdong Huang has been appointed as a Director and the Chairman of the board of directors of Huya, and Zhi Cheng, Hai Tao Pu and Guang Xu were each appointed as a Director of Huya.
Lingdong Huang currently serves as a General Manager at Tencent’s interactive entertainment group and as a director of TJ Sports Culture Development (Shanghai) Co., Ltd.
Zhi Cheng currently serves as the Assistant General Manager at Tencent, while Hai Tao Pu currently serves as a General Manager at Tencent and is a member of the Listing Committee of the Hong Kong Stock Exchange and General Committee of the Chamber of Hong Kong Listed Companies.
Guang Xu also currently serves as a General Manager at Tencent’s interactive entertainment group.
“The transaction is consistent with our strategy to connect industry partners and users via an expanding and open ecosystem.”
Mark Ren, Tencent
Mr. Mark Ren, Chief Operating Officer of Tencent, said: “Huya combines a self-reinforcing content ecosystem with strong execution capabilities to create an engaged, interactive community for game users.
“The transaction is consistent with our strategy to connect industry partners and users via an expanding and open ecosystem. By supporting Huya’s management team, we look forward to more business synergies and innovative services for game users.”
“We are confident that we will further strengthen our ecosystem, increase our market position and accelerate our growth.”
Rongjie Dong, Huya
Mr. Rongjie Dong, Chief Executive Officer of Huya, added: “This is an exciting opportunity for Huya. We believe this transaction will further expand Huya’s access to Tencent’s rich resources and bring more values to our shareholders and our users.
“Huya’s management team will work closely with Tencent to explore more business opportunities in game live streaming, e-sports tournaments, and other online entertainment areas and provide more innovative and compelling services and products to better serve our users.
“We are confident that we will further strengthen our ecosystem, increase our market position and accelerate our growth.”
“We believe Tencent’s global leading position in the gaming industry makes Huya well-positioned to open up a new dimension of growth opportunities.”
David Xueling Li, JOYY
Mr. David Xueling Li, Chairman and Chief Executive Officer of JOYY, added: “We are privileged to have witnessed Huya’s rapid growth and achievements to become a leading game live streaming platform in China since its inception, demonstrating strong capabilities of Huya’s management team and innovation genes of JOYY Group.
“We believe Tencent’s global leading position in the gaming industry makes Huya well-positioned to open up a new dimension of growth opportunities.
“JOYY will remain committed to our short-form video and live streaming products in the global market and we hope this transaction could bring additional values for all parties and maximize the long-term interests of JOYY’s shareholders in various ways.”Music Business Worldwide
