Baidu has officially acquired YY Live, JOYY Inc.’s video-based live-streaming business, for approximately $2.1 billion in cash. The deal, initially agreed upon in 2020 for $3.6 billion, faced setbacks due to regulatory issues. However, with the latest $240 million payment, the transaction is now complete.
Baidu had already transferred $1.86 billion in February 2021 as part of the original agreement. Furthermore, the completion of this deal unlocks $1.6 billion from escrow accounts, funds that Baidu may now use to strengthen its cloud and AI infrastructure. The company has been expanding in artificial intelligence, recently open-sourcing its AI models and making its chatbot available for free.
The acquisition was delayed due to regulatory approvals, which caused the original $3.6 billion deal to fall through. Reuters previously reported that government restrictions were a major factor in the delay. Additionally, Beijing’s recent shift in regulatory policies has allowed stalled deals like this to move forward.
Following the announcement, Baidu’s U.S.-listed shares increased by 1%, while JOYY’s stock rose by 6%. The transaction is expected to help Baidu expand in the live-streaming and entertainment industry, where it faces competition from ByteDance, the parent company of TikTok and Douyin.
China’s video-streaming market has been growing rapidly, with platforms such as JioHotstar in India recently recording 600 million live views. Companies like Baidu are looking to gain a stronger foothold in this space as demand for digital content continues to rise. At the same time, Baidu’s subsidiary, iQIYI (IQ.O), has faced challenges competing with platforms like Tencent Video and Alibaba’s Youku. The company has struggled with market share, as new players and established competitors continue to dominate the industry. The acquisition of YY Live marks a step toward Baidu’s broader push into the AI, cloud, and digital entertainment sectors. However, the company has not disclosed what led to the sudden approval of the deal after years of regulatory obstacles.