Tencent ‘in discussions’ over $10bn Huya-DouYu merger

Chinese tech giant Tencent is said to be pressing for a merger of China’s biggest game-streaming platforms Huya and DouYu.

Tencent, which already owns 37 per cent of Huya and 38 per cent of DouYu, is reported to be in discussions to merge the game platforms, Reuters reports.

A potential deal would see Tencent emerge as the largest shareholder of the combined business which would establish an online heavyweight with more than 300 million users and a combined market value of $10bn (€8.42bn), according to the report.

The deal, which would shore up its domestic market position, would also help Tencent fight off challengers like ByteDance, the owner of TikTok which is working on several fully-fledged games simultaneously.

China’s game-streaming market is estimated to generate $3.4bn in revenue this year, according to Shanghai-based consulting firm iResearch.

Bloomberg analyst Vey-Sern Ling said: “As the major shareholder of both platforms, Tencent would benefit because a merger would remove unnecessary competition between them, the enlarged scale can also help to drive cost synergies and fend off emerging competitors.”

It was recently reported that Tencent is also eyeing a dominant share of the Chinese sports streaming market and is said to have approached Baidu to buy a stake in its Chinese video streaming platform iQiyi.

Launched in August 2018, iQiyi Sports is a joint venture between video platform iQiyi and Super Sports Media, the Chinese agency with activities in rights acquisition, streaming and sports content production.