Huya seals MTG partnership with ESL stake
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Joseph O'Halloran
| 02 September 2019

Scandinavian pay-TV firm Modern Times Group (MTG) has announced that it has entered into a binding term sheet and the forming of a strategic joint venture as part of a transaction that allows Chinese game live streaming platform Huya to acquire a minority stake in MTG’s portfolio company Turtle Entertainment GmbH (ESL).

Huya is a leading game live streaming platform in China with a large and active game live streaming community. It works with eSports event organisers, as well as major game developers and publishers, and has developed esports live streaming as one of the most popular content genres on its platform. Huya has also extended its content to other entertainment content genres and its platform also functions as a marketplace for broadcasters and talent agencies.

If completed, the transaction —made up of both primary and secondary shares for $30 million giving ESL a nominal value of $425 million — will further strengthen ESL’s stated position as the leading and largest eSports company globally, and the forming of a joint venture between ESL and Huya will create a natural alliance to facilitate expansion of the former’s offering in the Chinese market.

ESL and Huya also plan to host and build local Chinese eSport competitions connected to the global ESL tournament calendar to ensure maximum Chinese esports athlete participation on a global scale. The Chinese eSport market is expected to generate revenues of $210 million in 2019, overtaking Western Europe as the second-largest region globally in terms of revenues.

As part of the transaction, ESL will also issue new shares at a value of $ 22 million to increase capital to be used for further expansion, parts of which will be used by ESL to fund its pro rata part of the joint venture company.

“We are pleased to establish a close partnership with ESL, which demonstrates Huya’s further penetration into the global esports sector,” Huya chief executive officer Rongjie Dong. “Together with ESL, we are thrilled to bring more world class global esports content to Chinese gaming enthusiasts.”

“We are excited to announce this term sheet for an important strategic partnership which provides us with a strong partner in Huya to pave the way for a successful ESL expansion into the thriving Chinese eSport and gaming market in due time,” added MTG President and CEO Jørgen Madsen Lindemann.