As a dramatic plot twist in the merger and acquisition landscape, Chinese technology conglomerate Baidu has decided to abort its $3.6 billion acquisition of YY Live, a video-based entertainment live streaming business under the ownership of social media platform Joyy Inc. The news was revealed via a filing to the Hong Kong Stock Exchange, providing details on the failed acquisition.
According to the filing, the decision to pull out from the acquisition was made by Baidu’s affiliated entity, Moon SPV. It exercised its contractual right to terminate the deal on grounds of the target entity’s failure to meet certain key conditions. Among these unfulfilled conditions was the necessity to obtain critical regulatory approvals from government authorities which had not been achieved as of the end of December, last year.
The cancellation of this mammoth acquisition sent shockwaves throughout the market. Following the public announcement, Joyy Inc. experienced a significant decline in stock prices. Reportedly, the social media company is now seeking counsel and has expressed a resolve to ‘consider all options at its disposal’. For further information, a detailed report can be found at Law.com.