Baidu Terminates Acquisition of YY Live Broadcast Business
The landscape of China’s live broadcast industry took a surprising turn on January 1, 2024, when Baidu announced the termination of its acquisition of YY Live, owned by Huanju Group. The termination comes after more than three years of negotiation and planning for the acquisition, which was initially seen as a win-win for both companies.
Baidu claimed that the share purchase agreement stipulated that the completion of the acquisition must meet certain prerequisites, including obtaining necessary regulatory approvals and other conditions. As of the final deadline on December 31, 2023, all the prerequisites had not been met, leading to the termination of the agreement.
Huanju Group responded by stating that it would seek legal advice and consider all options in response to the notice from Baidu. The acquisition was deemed to be a crucial move for Baidu, which had been working to strengthen its presence in the live broadcast industry.
In November 2020, Baidu signed an agreement with Huanju Group to acquire YY Live for US$3.6 billion, the largest single acquisition amount since Baidu was founded. The acquisition aimed to provide Baidu with an excellent traffic portal and enhance its e-commerce delivery capabilities.
However, market feedback expressed skepticism about the future of the transaction due to the perceived saturation of the live broadcast industry and the high acquisition price.
Baidu was hopeful that the acquisition of YY Live would help it tap into the live broadcast business and provide a platform to monetize its traffic. The original plan involved integrating YY Live into Baidu’s corporate system to create a closed-loop ecosystem from product search to purchase.
Before the termination, the integration of YY Live into Baidu’s corporate ecosystem had already begun. In February 2021, Huanju Times announced that the sale of YY Live business to Baidu had been basically completed. Meanwhile, the divestment of YY Live is an important step in Huanju Times’ overseas strategy.
For Joyful Times, the decision to exit the domestic live broadcast business was influenced by the impact of the COVID-19 pandemic and the desire to shift focus to overseas markets. However, analysts believe that the company faces challenges in its overseas business, particularly due to competition from platforms like TikTok and YouTube.
With the termination of Baidu’s acquisition of YY Live, the domestic live broadcast landscape is continuing to evolve, with traditional platforms declining in favor of short video platforms. Baidu itself is making concessions to focus on other sectors, while Huanju Times wants to redirect resources to its overseas business.
The future of YY Live, once seen as a promising acquisition, now remains uncertain amid the ever-changing dynamics of the live broadcast industry.