Baidu may abandon the YY acquisition, possibly due to lack of regulatory approval, and instead focus on AI investment

Baidu announced that it would terminate its acquisition of Huanju Group’s domestic video entertainment live broadcast business by exercising its contractual rights on January 1.

According to the 21st Century Business Herald, on January 2, people familiar with the matter admitted that the acquisition was not completed. Both parties knew the reason, mainly because they did not obtain regulatory permission, and it was not Baidu’s initiative to give up YY. From another perspective, Baidu's enthusiasm for investing in the field of live broadcasting is no longer what it used to be. It is expected to withdraw funds after terminating the acquisition and continue to invest in AI in the future. "When the two parties signed the agreement before, they were working hard in a good direction, but the plan could not keep up with the changes. When the delivery conditions were not met, both parties knew where they were not met." said the person familiar with the matter. In fact, for more than two years, Baidu has been operating YY on its behalf.

On November 17, 2020, Huanju Group and Baidu announced that the two parties had signed an agreement, and Baidu would acquire YY Live Broadcast owned by Huanju Group for approximately US$3.6 billion (note on this site: currently approximately 25.632 billion yuan) in cash. , including but not limited to YY mobile application, YY.com website and YY PC, etc.

The share purchase agreement provides that the closing of the proposed acquisition is subject to certain prerequisites, including the receipt of necessary governmental regulatory approvals and other conditions, and if the proposed acquisition does not close by the final deadline, neither the buyer nor the seller will The right to terminate the share purchase agreement. As of December 31, 2023, the final closing date, the conditions prerequisite to closing specified in the Share Purchase Agreement have not yet been fully satisfied.

That night, Huanju Group issued an announcement stating that it had received a notice from a Baidu affiliate to terminate the share purchase agreement in November 2020. The sale of YY Live to Baidu was basically completed on February 8, 2021. And certain matters still need to be completed in the future, but Baidu claimed in the notice that it had exercised its right to terminate the share purchase agreement and canceled the transaction. Huanju Group is seeking legal advice and will consider all options available to it in response to Baidu's notice.

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