Economic Observer Online
Mar 12, 2012
By Pang Lei
Original Article: [Chinese]
Three months after we reported that Tudou and Youku were "at War," China's two leading video websites - Tudou (土豆) and Youku (优酷) - have announced that they plan to merge to form a new company called Youku Tudou Inc.
According to a press release which was published on Monday afternoon:
"Youku Inc. ("Youku") and Tudou Holdings Limited ("Tudou") announced today that they have signed a definitive agreement for Tudou to combine with Youku in a 100% stock-for-stock transaction. Under the terms of the agreement, each Class A ordinary share and Class B ordinary share of Tudou issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive 7.177 Class A ordinary shares of Youku, and each American depositary share of Tudou ("Tudou ADSs"), each of which represents four Tudou Class B ordinary shares, will be cancelled in exchange for the right to receive 1.595 American depositary shares of Youku ("Youku ADSs"), each of which represents 18 Youku Class A ordinary shares resulting in Youku and Tudou shareholders and ADS holders owning approximately 71.5% and 28.5% of the combined entity, respectively, immediately upon completion of the transaction. Upon completion, the combined entity will be named Youku Tudou Inc. Youku's ADSs will continue to be listed on the NYSE under the symbol "YOKU"."
In December, Tudou and Youku entered into a war of words over alleged copyright infringements.
At the time, an industry insider told the EO that the "war" between the two websites may serve as an opportunity to solve the "copyright infringement" problems that exist in China. Given that the war has now become peace, we're not sure what will become of China's "copyright infringement" problems.