Hong Kong: Youku Inc., China’s biggest online video company, won approval from shareholders to acquire competitor Tudou Holdings Ltd., a deal that will extend its lead over websites run by Baidu Inc. and Tencent Holdings Ltd.
Shareholders passed all resolutions at Youku’s shareholders’ ballot related to the all-stock transaction with Tudou, Ryan Cheung, corporate finance director at Youku, said at the meeting in Hong Kong on Monday. He declined to elaborate on the results.
The combination of China’s two biggest online video companies will help reduce content licensing and network costs, and generate savings of as much as $60 million (Dh220.37 million) annually, Youku said in March. Tencent, China’s biggest internet company, and local search-engine market leader Baidu are upgrading their video sites to add users and boost advertising sales.
Shareholders at Tudou approved the combination with Youku in a separate meeting on Monday, Shanghai-based Tudou said in a statement.
Youku, based in Beijing, accounted for 20.9 per cent of China’s online video market by revenue in the first quarter, compared with 11.5 per cent for second-placed Tudou, according to estimates by research company Analysys International. Baidu’s iQiyi unit ranked fourth with 6.7 per cent market share, more than Tencent’s 4.7 per cent, according to Analysys.
Tudou’s American depositary receipts (ADRs) rose 2 per cent to $29.30 in New York trading on Friday, giving the company a market capitalisation of $1.03 billion. Youku rose 1.6 per cent to $18.52.
Tudou’s investors will receive 1.595 Youku ADRs for each Tudou ADR they own in the proposed transaction, the companies said in March.
After the completion of the transaction, the combined company will have more than 300 million weekly users, Dele Liu, president of Youku, said on August 6.
