Chinese MNC Baidu has announced the termination of its planned $3.6 billion acquisition of Joyy Inc's Chinese live-streaming business, YY Live, via a filing with the Hong Kong stock exchange, casting doubt on the search engine giant's revenue diversification strategy. The failed deal, initiated in 2020, was intended to bolster Baidu's expansion beyond its core operations. However, Baidu affiliate Moon SPV Ltd terminated the share purchase agreement with Joyy due to the deal's closure conditions not being met by the end of 2023, as stated in Monday's exchange filing. Essential among these conditions was obtaining regulatory approvals from governmental authorities.
This development follows reports in 2021 suggesting that China's antitrust regulator was unlikely to endorse the deal, citing Beijing's aims to regulate significant data practices and combat monopolistic behaviours.
Joyy, renowned as a leading social live-streaming platform in China, has cultivated a global presence, boasting a user base of 277 million global monthly active users. The collapsed acquisition stands as a setback for Baidu's aspirations to diversify its revenue streams and expand into the lucrative live-streaming entertainment domain.
The fallout of this failed acquisition prompts uncertainties regarding Baidu's strategy for revenue growth beyond its core services. The move highlights the challenges posed by regulatory scrutiny in China's tech landscape and underscores the hurdles faced by companies seeking strategic acquisitions in an increasingly regulated market.
(with Reuters inputs)