An online anchor is seen at the stand of live streaming platform Douyu during the Comic Up 26 on July 25, 2020 in Shanghai, China.
VCG | Visual China Group | Getty Images
Tencent, which is Huya’s biggest shareholder and also owns over a third of DouYu, had been pushing for the deal for months, Reuters reported in August.
DouYu will receive 0.730 American depositary shares of Huya, representing a premium of 34.5% to DouYu’s last close of $14, valuing it at nearly $6 billion, according to Reuters calculation based on 317.5 million shares.
The merged entity would have a combined market share of more than 80% in the country, according to data from MobTech.
Huya and DouYu said their shareholders will each hold about 50% shares of the combined company on a fully diluted basis.
Huya Chief Executive Officer Rongjie Dong and his DouYu counter-part Shaojie Chen, will be co-CEOs of the combined company.
Tencent will integrate its game live streaming business under its “Penguin” arm with the combined businesses of Huya and DouYu after the merger for a total consideration of $500 million.
DouYu’s U.S.-listed shares, which have risen more than 65% this year, were up 23.2% before the bell.