Shareholders in Chinese online video firms Youku and Tudou have approved a planned merger, a deal that will create a single market-leading VoD company in the country.
Under the terms of the deal, which was proposed in March, the merged company will be known as Youku Tudou, with Youku to hold 71.5% of the business and Todu the remaining 28.5%.
Both firms have now released statements confirming their respective shareholder approval, following annual general meetings. Youku said “the parties expect to complete the merger as soon as practicable.”
The alliance is expected to help the companies make savings related to bandwidth management and other common expenses, and they will share licensed content.
In its recent earnings call Youku recorded a Q2 net loss of RMB62.8m (US$9.9m), compared to RMB28.1m (US$4.4m) for the same period in 2011. The firm put the increase down to content price rises, an increase in number of staff and “continuous and expanded investment in product development in mobile, search, social and paid services.” Net revenues were up 96% year-on-year at RMB387.4m (US$61m).
“We are pleased to see the continued rationalisation of the online video sector and improving content and bandwidth cost structure. The planned integration with Tudou is proceeding smoothly and we are on track to realise the potential of the combination of No.1 and No.2 online video platforms in China,” said Youku CEO Victor Koo, commenting on the firm’s quarterly numbers earlier this month.