China – MTG enters into joint venture with HUYABy Lewis - 2 September 2019
The Modern Times Group MTG AB (MTG) has announced the signing of a binding term sheet for a strategic partnership with the Chinese game live streaming platform HUYA Inc. The partnership allows HUYA to acquire a minority stake in MTG’s portfolio company ESL.
Subject to due diligence and the signing of definitive transaction documents, Huya has agreed to form a joint venture with MTG’s portfolio company Turtle Entertainment GmbH (ESL). The $30 million investment will facilitate MTG’s expansion into China.
Jørgen Madsen Lindemann, MTG’s President and CEO, said: “We are excited to announce this term sheet for an important strategic partnership. This 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 2019, the Chinese esports market is expected to generate revenues of $210 million, overtaking Western Europe as the second-largest esport region in terms of revenue. ESL and Huya plan to host and build local esport competitions connected to the global ESL tournament calendar to ensure maximum Chinese participation. As part of the transaction, ESL will issue new shares at a value of $22 million in order to increase capital for further expansion and fund the pro rata part of the joint venture company.
Rongjie Dong, Chief Executive Officer of Huya, said: “We are pleased to establish a close partnership with ESL which demonstrates Huya’s further penetration into the global esports sector. Together with ESL, we are thrilled to bring more world-class global esports content to Chinese gaming enthusiasts.”
MTG is a strategic and operational investment holding company in esports and gaming entertainment. HUYA Inc. is a game live streaming platform in China.