Mar. 13, 2012 (China Knowledge) - Youku.com Inc and Tudou Holdings Ltd, the top two online video companies in China
, announced Monday that they have signed a final agreement to merge into a new entity on Sunday, which both claimed to forge an industry leader in the world's biggest Internet market.
Pursuant to the agreement, the two firms will merge through a 100% share swap and form a combined entity named Youku Tudou Inc. Tudou will delist from the Nasdaq stock market, while Youku will continue trading on the New York Stock Exchange.
Upon the completion of the deal, Youku shareholders and holders of its American depositary shares will take a 71.5% stake in the new company, and those of Tudou will own the remaining 28.5%.
The two companies said that the merger is expected to be completed in the third quarter of this year.
At present, Youku leads the Chinese online video market with a 21.8% share, while small rival Tudou has a 13.7%, according to Internet research firm Analysys International.
In 2011, the market value of the Chinese online video industry doubled to RMB 6.27 billion, according to Beijing-based
IT consulting firm iResearch. China
had 325 million online video watchers last year, which accounted for 63.4% of the total Internet users in the country.