Core Viewpoint - Tencent Music is acquiring the leading online audio platform, Ximalaya, for a total of $1.26 billion in cash and shares, aiming to enhance user experience and creator revenue amidst industry changes [1][4]. Group 1: Acquisition Details - The acquisition consists of $1.26 billion in cash and up to 5.1986% of Tencent Music's ordinary shares [4]. - Ximalaya will maintain its brand and operational independence, with its core management team and strategic direction remaining unchanged [4]. - As of June 10, 2023, Ximalaya has over 2,300 employees, and their positions and salaries will not be affected by the acquisition [4]. Group 2: Market Position and Performance - Ximalaya is the largest online audio platform in China, holding a 60.5% market share in mobile listening duration and a 25% market share in online audio revenue as of 2023 [4]. - The platform had an average of 303 million monthly active users in 2023, including 133 million from mobile and 170 million from IoT and third-party platforms [4]. Group 3: Financial Performance - Ximalaya's revenue from 2021 to 2023 was 5.857 billion, 6.061 billion, and 6.163 billion yuan, respectively [7]. - The company reported a net loss of 5.106 billion yuan in 2021, followed by net profits of 3.700 billion yuan and 3.736 billion yuan in the subsequent years [7]. - Adjusted net profits were -718 million, -296 million, and 224 million yuan for the same period [7]. Group 4: Investment and Shareholder Structure - Ximalaya's previous attempts to go public were unsuccessful, with multiple rejections from the U.S. SEC and Hong Kong Stock Exchange [7]. - The company has raised a total of $959 million and 2.962 billion yuan through 12 funding rounds from 2012 to 2020, with notable investors including Tencent and Xiaomi [9]. - The last funding round in 2020 valued the company at $4.345 billion [9].
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