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According to Tudou the deal will take the form of a 100% stock-for-stock transaction, with the new company to be called Youku Tudou Inc.
“We intend to lead the next phase of online video development in China. Youku Tudou Inc. will represent a differentiated leader in the online video market in China with the largest user base, most comprehensive content library, most advanced bandwidth infrastructure and strongest monetisation capability within the sector,” said Victor Koo, founder, chairman and chief executive officer of Youku.
“Youku Tudou Inc. will have the reach and scale to bring our users high quality content at high speeds. The combined company will have the two leading online video brands in China: Youku and Tudou.”
The deal has reportedly been approved by the boards of both companies, and just needs shareholder approval to go through.
The merger is an interesting one, given that the companies are more renowned for fierce legal battles than any sense of camaraderie.
“Youku and Tudou share a vision for the future of online video in China and how to deliver the best user experience possible,” said Gary Wang, founder, chairman and chief executive officer of Tudou.
“This transaction further strengthens our market position as Tudou brings its valuable brand, library of professional licensed content, user-generated content platform, extensive user base, broad range of partnerships and expertise in mobile video. Together, we believe Youku Tudou Inc. will be able to provide the best-in-class experience for users interested in uploading, watching and sharing videos, and to grow together with our advertisers, and our content and industry partners.”
While the companies’ operations will merge, Tudou claims that it will remain a separate platform.
Youku was founded in 2006 and was first listed on the New York Stock Exchange in December 2010.
Tudou meanwhile has been around since 2005. It also recently partnered with China’s biggest microblogging service Sina Weibo to allow any Sina Weibo user who isn’t already registered on Tudou to “upload and share videos seamlessly to and from Tudou’s video site”.