Tencent Now Huya's Largest Shareholder
Chinese tech and gaming leader Tencent has acquired a majority stake in Huya from JOYY for approximately $262.6 million.
China's game livestreaming company, Huya Inc. (NYSE: HUYA), is now majority-owned by tech giant Tencent Holdings Ltd. (OTC: TCEHY; HKEX: 0700).
In a statement today, Huya said Tencent has purchased 16.5 million of its Class B ordinary shares from JOYY Inc. (Nasdaq: YY) for approximately $262.6 million. The deal gives Tencent around 50% of the voting power, or approximately 51% based on the issued and outstanding shares of Huya, according to the statement.
In addition, Lingdong Huang, general manager at Tencent's interactive entertainment group and a director of TJ Sports Culture Development (Shanghai) Co. Ltd., was appointed as chairman of Huya. Zhi Cheng, Hai Tao Pu, and Guang Xu, from Tencent, have also joined the Huya board of directors.
Rongjie Dong, the chief executive officer of HUYA, called the opportunity "exciting" for the company as it will now have access to Tencent's resources.
"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," Dong said.
He added, "We are confident that we will further strengthen our ecosystem, increase our market position and accelerate our growth."
Tencent, one of the world's largest gaming companies, commands the second-largest market capitalization on the Hong Kong exchange. In the three months through December, Tencent generated $15.2 billion in revenue, up 25% year-over-year on a net profit of $3 billion.
In early trading Friday, HUYA stock soared to a high $18.54 per American depositary share but tumbled to $16.47 per share by midday. That represents a 3% decrease from Thursday's close. In the U.S., Tencent inched 1% lower to $48.26 per share. JOYY was the only one to gain, trading nearly 5% higher, at $57.17 per ADS, as the coronavirus continues to affect the overall volatility of the markets.
Founded in 2016, Huya competes with DouYu International Holdings Ltd. (Nasdaq: DOYU) in China's livestreaming market.
Going forward, Huya said it will operate independently and remain headquartered in Guangzhou.