By Dave Sebastian
Huya Inc. has agreed to merge with DouYu International Holdings Ltd. through a stock-for-stock transaction, the live-streaming companies said.
DouYu shareholders will get 7.3 Huya shares for each DouYu share, the companies said Monday. They said shareholders of each company will hold about 50% of the combined company if the combination is approved.
DouYu would become a privately held and wholly owned subsidiary of Huya if the combination is completed, expected in the first half of 2021, the companies said.
The companies said Huya Chief Executive Rongjie Dong and DouYu Chief Executive Shaojie Chen would become co-CEOs and board members of the combined company.
DouYu and Nectarine Investment Ltd., a wholly owned subsidiary of Tencent Holdings Ltd., have also entered into a reassignment agreement, through which Tencent will assign its interests under the Penguin e-Sports brand to DouYu for a $500 million consideration. Tencent's voting power in the combined company will be 67.5%, the companies said.
Both companies' boards have approved the combination, the companies said, and Huya shareholder JOYY Inc. has also given its stamp on the agreement.
DouYu said its board has approved a cash dividend of $60 million to be paid on or around the transaction's closing date to DouYu shareholders.
In premarket trading, American depositary shares of DouYu were up nearly 14%, and Huya up 7.4%.
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(END) Dow Jones Newswires