On March 12, two Chinese Internet video giants Youku and Tudou
announced that the two companies have signed a final agreement on
March 11 to combine their services in a 100% stock-for-stock
transaction to create a new service provider, Youku Tudou Inc,
allowing Tudou to exit the stock market.
After the combination, Youku's shareholders and holders of
its American Depository Receipts (ADRs) will have 71.5% of equity
of the new company, with Tudou's shareholders and its ADR
holders entitled to 28.5% of the combined equity. Youku's ADRs,
under the symbol of "YOKU", will continue to be listed on
the New York Stock Exchange.
According to the unaudited financial results of 2011 announced
by Tudou and Youku, Tudou and Youku have achieved annual net income
of RMB 511.2 million yuan and RMB 897.6 million yuan last year
respectively. The combined turnover does not reach the application
thresholds for concentration of undertakings prescribed in Article
2 of the State
