China’s Baidu Halts Multi-Billion-Dollar Deal with JOYY’s Live Streaming Business

China’s Baidu Halts Multi-Billion-Dollar Deal with JOYY’s Live Streaming Business


Baidu has canceled a planned $3.6 billion acquisition deal for JOYY’s live-streaming business in China.

Baidu planned this acquisition to expand its live-streaming operations in China and grow its revenue. However, this deal has now fallen through according to a filing with the Hong Kong Stock Exchange.

JOYY is a company listed on NASDAQ, and it is also behind a popular live-streaming platform known as YY Live.

Baidu-JOYY Deal Fails Due To Unmet Conditions

The deal between Baidu and JOYY has failed to materialize due to some conditions not being met. The deal had a deadline of December 31 for these conditions to be met.

In its filing, Baidu revealed that securing the necessary regulatory approvals was among the conditions that failed to be met.

“Pursuant to the Share Purchase Agreement, the closing of the proposed acquisition is subject to certain conditions including, among others, obtaining necessary regulatory approvals from governmental authorities,” the filing read.

JOYY Inc. has received a written notice from an affiliate of Baidu, Inc. purporting to terminate the Share Purchase Agreement dated November 16, 2020, pursuant to which Baidu would acquire JOYY’s domestic video-based entertainment live streaming business (“YY Live”).…

— Mr Chart Norris (@kholov23) January 1, 2024

Baidu is the leading search engine in China. The deal with JOYY was announced in November 2020. At the time, the search engine revealed it agreed to a purchase deal to expand its revenue sources instead of relying solely on advertising.

Baidu and JOYY anticipated that this deal would close during the first half of 2021, but this failed to happen, with the process dragging on until the tail end of 2023.

In 2021, some reports had suggested that the deal was unlikely to get regulatory approval. At the time, Beijing wanted to expand its control over companies with access to large amounts of consumer data. Regulators were also seeking to prevent market monopolization by some industry players.

However, in recent times, China has eased its crackdown on big tech companies in China to revive its economic outlook. Beijing has been addressing the role that tech companies play in the economy.

At the time the acquisition was announced, Baidu’s CEO, Robin Li, had revealed that the deal would accelerate Baidu’s growth into a leading live-streaming platform while also adding to the company’s positive financial numbers.

Baidu Is Eyeing Live Streaming

Baidu, like many tech companies, has been exploring the lucrative live-streaming industry. JOYY is a leading social live-streaming platform in China, and it has achieved fast global expansion. It currently has 277 million monthly users globally.

If this deal had gone through, Baidu would have witnessed a sudden spike in revenues from streaming users.

YY Live generates its revenues in the same manner as other live-streaming sites in China. YY Live generates funds from users looking to purchase virtual gifts from those performing on the site.

During the third quarter of 2023, JOYY posted net revenues of $586.7 million. The figure declined from the $567.1 million reported during the same period in 2022. Additionally, the live-streaming revenue dropped by nearly 9% to $495.8 million.

JOYY has already released a statement on the denial of approval, saying it received a notice from Baidu on Monday saying it was exercising its right to cancel this transaction effectively.

It appears that JOYY has yet to fully give up on this acquisition. Its response statement said it sought legal advice and would consider all the available options to respond to this notice.

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