In a merger that will immediately change the online video landscape, Youku Inc. and Tudou Holdings Ltd. have signed a definitive agreement for Tudou to combine with Youku in a 100 percent stock-for-stock transaction. The new company will be named Youku Tudou Inc.
The deal has already been approved by both companies’ boards of directors, although it is subject to customary closing conditions including shareholder approvals by Youku’s and Tudou’s shareholders, and is expected to close in the third quarter of 2012.
“We intend to lead the next phase of online video development in China. Youku Tudou Inc. will represent a differentiated leader in the online video market in China with the largest user base, most comprehensive content library, most advanced bandwidth infrastructure and strongest monetization capability within the sector,” said Victor Koo, founder, chairman and chief executive officer of Youku.
He added that the united companies expect to see significant synergies across a number of areas including leveraging licensed content over a larger user base and realizing efficiencies in bandwidth management and other common expenses.
“Youku and Tudou share a vision for the future of online video in China and how to deliver the best user experience possible,” said Gary Wang, founder, chairman and chief executive officer of Tudou. “This transaction further strengthens our market position as Tudou brings its valuable brand, library of professional licensed content, user generated content platform, extensive user base, broad range of partnerships and expertise in mobile video. Together, we believe Youku Tudou Inc. will be able to provide the best-in-class experience for users interested in uploading, watching and sharing videos, and to grow together with our advertisers, and our content and industry partners.”
Information about the merger was shared in a conference call hosted by Youku’s founder, chairman and chief executive officer, Victor Koo; Tudou’s founder, chairman and chief executive officer, Gary Wang; Youku’s senior vice president and chief financial officer, Dele Liu; Tudou’s chief financial officer, Bin Yu; Youku’s senior vice president of finance, Michael Xu; and Youku’s corporate finance director, Ryan Cheung.
Goldman Sachs (Asia), Allen & Company and China Renaissance Holdings acted as financial advisers to Youku, and Skadden, Arps, Slate, Meagher & Flom, TransAsia Lawyers and Conyers Dill & Pearman acted as legal advisers to Youku in connection with the transaction. Morgan Stanley Asia acted as the lead financial adviser and Credit Suisse Securities (USA) acted as the co-financial advisor to Tudou in connection with this transaction. Kirkland & Ellis LLP, Fangda Partners and Maples and Calder acted as legal advisers to Tudou.
Press release – http://tinyurl.com/79a97cs