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The Chinese game broadcasters Huya and DouYu are merging

(Reuters) – HUYA reported it would buy DouYu in a stock-for-shares merger deal.

Reuters reported in August that Tencent, which is Huya’s largest shareholder and owns more than a third of DouYu, had been pushing for the deal for months.

DouYu will receive 0.730 US depositary shares of Huya, which represents a 34.5% premium over DouYu’s last close of $14, which has a value of $6 billion, according to Reuters calculations based on 317.5 million shares.

The combined entity will have a market share of more than 80% in the country, according to data from MobTech.

Huya and DouYu said that their shareholders would own about 50% of the merged company’s shares on a fully diluted basis.

Huya CEO Rongjie Dong and DouYu partner Shaojie Chen will co-chair the combined company.

In addition, Tencent will also merge live game streaming on Penguin engine a long with the joint business of Huya and DouYu after the merger for a total amount of $500 million.

DouYu’s US-listed shares raised by more than 65% this year, up 23.2%.

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