Modern Times Group MTG AB has entered into a ‘binding time sheet’ with Chinese streaming platform HUYA Inc, with the latter acquiring a stake in ESL as a result.
In a press release, MTG announced that the strategic partnership will see Huya form a joint venture with Turtle Entertainment GmbH (ESL), MTG’s portfolio company to facilitate expansion into the Chinese market. ESL and Huya will host local esports tournaments in China linked to the ESL tournament circuit to encourage and ensure Chinese team and player participation.
Prior to this deal, ESL announced IEM Beijing taking place in November with Chinese and Asian qualifiers for the regional CS:GO scene, showing a desire to expand further into the Asian market.
ESL and Huya 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.
In terms of primary and secondary shares, the investment size is stated to be $30 million, with ESL issuing new shares valued at $22 million to increase capital in part for the joint venture company. MTG retain majority ownership of ESL with the remaining shares owned by ESL’s founders.
Huya’s Chief Executive Officer Rongjie Dong stated in the press release that they “are thrilled to bring more world class global esports content to Chinese gaming enthusiasts” while MTG President and CEO Jørgen Madsen Lindemann also explained their view of the deal.
“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“Jørgen Madsen Lindemann, MTG President and CEO
It is expected that the deal will be signed during Q4 of 2019, subject to ‘customary confirmatory due diligence’ and further negotiation and agreement.