GuShiio.com 
After four years of repeated choices, YY Live Broadcast finally stayed on Baidu.
GuShiio.comAGI获悉，2月25日晚，Baidu (HKG: 9888/NASDAQ: BIDU) and Huanju Group (NASDAQ:YY) reached an acquisition agreement,Baidu acquired YY Live, Huanju Group’s domestic video entertainment live broadcast business, for US$2.1 billion (approximately RMB 15.2 billion).
Huanju Group said that the company had previously received approximately US$1.86 billion in February 2021, and today, the company received approximately US$240 million in cash consideration.
The announcement shows that after the new agreement is reached, the US$1.6 billion (approximately 11.5 billion yuan) previously deposited in the escrow account has been fully returned to Baidu and will be invested in cloud and AI infrastructure construction.
According to statistics from GuShiio.comAGI, compared with the initial US$3.6 billion acquisition transaction in 2020, the amount of new acquisition transactions from YY Live and Baidu has decreased by about 43%.In this regard, neither Baidu nor Huanju gave further explanation.
The transaction began on November 17, 2020. On the same day, Huanju Group and Baidu announced that the two parties had signed an agreement that Baidu would acquire Huanju’s domestic video entertainment live broadcast business YY Live Broadcast, including but not limited to YY mobile applications, YY.com website and YY PC, etc., for approximately US$3.6 billion in cash (subject to consideration adjustment according to the agreement). At that time, the transaction was expected to be completed in the first half of 2021.
But then, Muddy Waters released a report on JOYY The short report (including YY Live Broadcast Business) points out that the revenue of Huanju Group (including YY Live Broadcast) is suspected of fraud. Huanju Group’s methods of fraud include using robot paying users on JOYY’s own servers, colluding with head anchors and large guilds to repeatedly pay rewards and swipe orders. It is expected that nearly 90% of the revenue reported by Huanju Times for YY Live Broadcast Business will be fake data. The revenue data of international live broadcast business BIGO LIVE also contains 80% falsification.
According to public records, in November 2020, JOYY and certain current and former senior managers and directors were named defendants in a federal securities class action lawsuit.
However, Baidu does not seem to care. The transaction began to integrate Baidu and YY live broadcast teams. In March 2021, Baidu stated in a document submitted to the Hong Kong Stock Exchange that the acquisition has been basically completed and some usual matters are expected to be completed in the near future. In accordance with the terms and schedule of the share purchase agreement, after taking into account a working capital adjustment of US$100 million, we paid a total of US$1.9 billion to JOYY and its designated co-management accounts, and deposited a total of US$1.6 billion to multiple co-management accounts. rdquo;
However, three years after the agreement was signed, Baidu announced the termination.On January 1, 2024, Baidu issued an announcement announcing that it would exercise its contractual rights to terminate its transaction with Huanju Group. As of December 31, 2023, the delivery preconditions stipulated in the share purchase agreement have not yet been fully met, and it is stated that US$3.6 billion will be returned to Baidu.
In fact, as early as 2021, GuShiio.comAGI reported on key developments in M & A transactions between the two parties such as termination of acquisitions and team integration. (See the previous article on GuShiio.com:”Will the US$3.6 billion acquisition of YY fall through, will Baidu Live Broadcast usher in a dark moment?” “GuShiio.com Exclusive| Baidu has made major adjustments to the YY live broadcast architecture, integrating 20+ centers into seven major departments “)
(See the previous article on GuShiio.com:”Baidu Terminates US$3.6 Billion Acquisition, Gathering: There is indeed something to be completed, and all rights will be reserved”)
GuShiio.comAGI learned that in the past year or so, Baidu and Huanju have been communicating about this transaction. In particular, Baidu has established a Baizhan Live Broadcast on the main body of YY. YY Live Broadcast provides technical and service support to effectively integrate Baidu App, good-looking videos, Post Bar and other platforms. Traffic from multiple platforms has received more than 100 million exposure every day. YY Live Broadcast brings Baidu billions of yuan in revenue every year.
According to the listing prospectus released by Baidu Hong Kong stocks in March 2021, in 2020, YY’s live broadcast revenue was 9.7 billion yuan and net profit was 3.3 billion yuan, accounting for 9.3% and 16.5% of Baidu’s revenue and net profit for the same period respectively.
Now, it seems that the dust has settled on this merger case. Baidu and Huanju each take a step back: Baidu gave up US$2.1 billion, and YY also refused to accept the final payment of US$1.6 billion.In addition, YY Live Broadcast is expected to be integrated into Baidu’s Mobile Ecosystem Business Group (MEG) department.
The four-year acquisition between Baidu and YY has come to an end, but for Baidu, YY’s continued stay in Baidu also has its value. Baidu can withdraw funds, continue to collect YY’s live broadcast revenue, and further strategically focus on AI;YY, as a live broadcast application, will also provide more implementation scenarios for Baidu’s AI technology.
On January 13 this year,YY Live announced the release of AI companion digital person Linger, which is the first live broadcast service-based digital person launched by YY Live. At the same time, on February 25, YY announced its official access to DeepSeek and launched a low-latency, non-stuck version of Y-DeepSeek R1-Full Blood. Its YY live broadcast, YY voice and other products have been launched on the product portal for users to experience.
However, after four years, the entire domestic live broadcast industry has undergone tremendous changes, and the value loss of YY in the hands of Baidu has become difficult to assess. Baidu has also turned to the AI field. It will be time to see what kind of new destiny YY live broadcast will usher in the future. Test.
As of press time, Baidu’s U.S. stocks rose slightly 0.68%, while Huanju Group rose 6.39%. In the past 12 months, Baidu’s U.S. and Hong Kong stocks have both fallen by 20%, while Huanju’s share price has risen by 66.2%.
