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Baidu‘s $3.6B acquisition plan for Nasdaq-listed JOYY‘s Chinese live-streaming business, YY Live, has been terminated.

  • Deal Fall Through: Baidu’s pursuit to diversify its revenue has met with a setback as the proposed deal, announced in 2020, failed to come to fruition. The deal was called off by Baidu affiliate Moon SPV, citing that the conditions for closing the deal, including necessary regulatory approvals, were not fully met as of the end of 2023.
  • Aftermath: JOYY, a leading Chinese social live-streaming platform with a global user base of 277 million monthly active users, is currently considering its options regarding the deal cancellation.
  • Acquisition Blocker: The Chinese antitrust regulator’s reluctance to approve the deal, as reported by Reuters in 2021, is in line with Beijing’s efforts to increase control of companies collecting large volumes of consumer data and to dismantle monopolistic practices.
  • Continuing Progress: Despite the setback, Baidu continues its efforts to compete with newer players like ByteDance in the online entertainment sphere. JOYY, one of the pioneers of Chinese live-streaming, boasts 1.61 million paying users globally and garnered a China-based revenue of $236M in the first nine months of 2023.

Baidu’s deal with Joyy faced challenges from the start, due to the Xi Jinping administration’s efforts to combat gaming addiction with controls for minors on online entertainment and freezing approvals for new gaming titles.

Even after an $80M market rout hit game publishers like Tencent and NetEase, China’s top gaming regulator appears to have softened its stance, rolling out draft rules to further curb time and money spent on games.

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