Industry

Baidu’s $3.6 Billion Bid for YY Live Could Fail

Oct 09, 2021, 20:04pm2021/10/09 20:04:14 Pandaily

According to recent reports publishes by Reuters and other media outlets, China’s antitrust regulator is unlikely to approve Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s acquisition of Joy Inc.’s video-based home live streaming business YY Live for $3.6 billion. The acquisition will be delayed until the application expires or one of the two companies withdraw their applications.

As a result, Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s plan to further expand its video game live-streaming business through the acquisition of YY Live may fail. As of the time of this article’s publication, Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> said that it had not received such news from Chinese regulators.

Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> announced in November last year that it would acquire YY Live for with about $3.6 billion, and expected to be completed in the first half of 2021. After the transaction is completed, YY Live will be retained, but its content, technology, and domestic live-streaming team will be provided to Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />.

The State Administration for Market Regulation said in a report in early September that it was conducting an antitrust review of 11 company transactions, including the Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />-YY deal. Two months ago, on the grounds of anti-monopoly practices,the regulator blocked Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s plan to spend $5.3 billion to merge Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />.

As for the reason why Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> planned to acquire YY Live, Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s CEO Robin Li said at the performance meeting: “YY Live has a very loyal user group and a large number of content creators, which are difficult for Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> to achieve at the current time.”

TMTpost has reported that Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> has paid $2 billion to Joy Inc., while the remaining $1.6 billion would be paid after regulatory approval. However, Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> did not make a comprehensive merger plan.

YY Live’s platform differs from other popular live commerce platforms in that hosts of this platform are rewarded by interacting with users through singing, dancing and playing games, which is currently seeing increased regulatory scrutiny.

The development plan of Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s live-streaming service is completely different from YY Live. Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s plan includes two parts, one is educational live-streaming, and the other is live commerce. Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s live-streaming platform is positioned as a placeto share new knowledge and experience.

Since the beginning of this year, many mid-level technical leaders in YY Live have resigned. The loss of integral employees is one of the important issues in this merger.

On August 17th, Joy Inc. announced that the company and Baidu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> had agreed to extend the deadline of the transaction to the date agreed by both parties. According to people familiar with the matter, the delay was due to the fact that the regulatory approval was still pending.