Chinese online video company Youku will buy another domestic online video operator Tudou in all stock deal worth over $1bn.
As per the terms of the agreement announced jointly, shareholders in Youku will own about 71.5% of the combined firm, which will be known as Youku Tudou, while Tudou will hold on to the remaining 28.5%.
Youku founder Victor Koo was quoted by Agence France Presses as saying that the combined company will have China’s largest user base, most comprehensive content library.
Though Youku and Tudou went public in the US in the last two years, they both failed to break even.
Youku will continue to be listed on the New York Stock Exchange while US listed shares in Tudou will be cancelled, the companies stated.
Koo told CNN that the combined entity intends to lead the next phase of online video development in China.
The deal, is expected to close in the third quarter, is pending regulatory and shareholder approval.
