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Huya Stock Surges As Tencent Drives Merger With Douyu

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Updated: 05 August 2020

Tencent Holdings, China’s largest gaming and social media company, is driving discussions to merge streaming platforms Douyu International Holdings (NASDAQ:DOYO) and Huya Inc (NYSE:HUYA), in a deal that, if it were to go ahead, would see Tencent take control of the market, according to reports in Reuters and the South China Morning Post.

Tencent owns 37% of Huya and 38% of Douyu and has been discussing the merger for a few months according to the reports, with Tencent looking to become the biggest shareholder of the merged companies.

Both Huya and Douyu are extremely popular video game streaming sites in China, with users flocking to the services to watch esports and professional gamers.

After the reports by both Reuters and the South China Morning Post, shares in Huya Soared premarket and are currently trading 12.07% higher at $28.14, while Douyu’s stock price has also jumped 14% to $16.97 per share.

The report by Reuters went on to say that the two firms would see them have a combined market share of 80% in China and a merger would lower costs, ease competition, and help Tencent keep rising challengers such as ByteDance at bay.