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MTG Enters Into Term Sheet With HUYA Inc. Regarding the Forming of a Joint Venture for China Esports Expansion and HUYA Investment Into ESL

George Miller

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MTG Enters Into Term Sheet With HUYA Inc. Regarding the Forming of a Joint Venture for China Esports Expansion and HUYA Investment Into ESL
Photo Source: caixinglobal.com
Reading Time: 3 minutes

 

Modern Times Group MTG AB (MTG) announced the entering into a binding term sheet and the forming of a strategic joint venture as part of a transaction that allows HUYA Inc. to acquire a minority stake in MTG’s portfolio company ESL.

  • Modern Times Group MTG AB (MTG) announces the signing of a term sheet for a new strategic partnership with leading Chinese game live streaming platform HUYA Inc. (Huya).
  • Pursuant to the term sheet, Huya has agreed to form a joint venture with MTG’s portfolio company Turtle Entertainment GmbH (ESL), the largest esports company in the world, to facilitate expansion into China, and to acquire a minority interest in ESL. The investment size is USD 30 million made up of both primary and secondary shares.
  • 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.
  • As part of the transaction, ESL will issue new shares at a value of USD 22 million to increase capital to be used for further expansion, parts of which will be used by ESL to fund its pro rata part of the joint venture company.
  • The terms of the transaction contemplated under the term sheet are binding. Both the joint venture and the acquisition by Huya of a minority interest in ESL are subject to customary confirmatory due diligence as well as the negotiation and signing of definitive transaction documents.

If completed, the transaction will further strengthen ESL‘s position as the leading and largest esports company globally, and the forming of a joint venture between ESL and Huya will create a natural alliance to facilitate expansion of ESL’s offering in the Chinese market. The Chinese esport market in 2019 is expected to generate revenues of USD 210 million, overtaking Western Europe as the second-largest esport region globally in terms of revenues*.

Huya will acquire USD 30 million worth of primary and secondary shares in ESL at a pre-money enterprise value of ESL of USD 425 million. As part of the transaction, ESL will issue new shares at a value of USD 22 million to increase capital to be used for further expansion, parts of which will be used by ESL to fund its pro rata part of the joint venture company.

“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,” says Rongjie Dong, Chief Executive Officer of Huya.

“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,” says MTG President and CEO Jørgen Madsen Lindemann.

Huya is a leading game live streaming platform in China with a large and active game live streaming community. The Company cooperates with esports event organizers, as well as major game developers and publishers, and has developed esports live streaming as one of the most popular content genres on its platform. The Company has created an engaged, interactive and immersive community for game enthusiasts of China’s young generation. Building on its success in game live streaming, HUYA has also extended its content to other entertainment content genres. HUYA’s open platform also functions as a marketplace for broadcasters and talent agencies to congregate and closely collaborate with the Company.

Founded in Germany in 2000, MTG’s portfolio company Turtle Entertainment GmbH (ESL) has been developed into the world’s largest esports company. It operates high profile, branded international leagues and tournaments such as ESL One, Intel® Extreme Masters, ESL Pro League and other top tier stadium-size events, as well as ESL National Championships. Through the Joint Venture ESL and Huya will build local Chinese esports competitions connected to the global ESL tournament calendar to ensure maximum Chinese esports athlete participation on a global scale.

The terms of the transaction contemplated under the term sheet are binding. The transaction is subject to customary confirmatory due diligence, as well as further negotiation of, and agreement on, complete transaction documentation and signing is expected to take place during the fourth calendar quarter in 2019. MTG – the majority owner in ESL – will retain majority ownership of ESL also following a completed transaction. The remaining shares in ESL are owned by the founders of ESL.

Source: MTG

George Miller started his career in content marketing and has started working as an Editor/Content Manager for our company in 2016. George has acquired many experiences when it comes to interviews and newsworthy content becoming Head of Content in 2017. He is responsible for the news being shared on multiple websites that are part of the European Gaming Media Network.

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Asia

Almost Two-Thirds of Japanese Oppose Plans for Integrated Resorts

Niji Narayan

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Almost Two-Thirds of Japanese Oppose Plans for Integrated Resorts
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Japanese citizens continue to oppose the plans for integrated resorts. According to a recent poll, 57.9% of the respondents disagree with the plan and 26.6% agree with it. Among the supporters, 62.8% said they would back the establishment of a casino resort in their area and 29.0% said they would not.

Japan’s public opinion may play a key role in whether some prefectures decide to press ahead with plans to host an IR. Yokohama recently announced it was planning to enter the race and swiftly became the firm favourite amongst major IR operators. However, public opinion against IRs is particularly strong there and may ultimately sway political opinion.

The continued opposition comes despite a concerted effort by operators to win hearts and minds in Japan, sponsoring local festivals and sports events and promoting non-gaming and other elements of IRs.

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Asia

Japan to Launch Casino Commission in January 2020

Niji Narayan

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Japan to Launch Casino Commission in January 2020
Photo Source: forbes.com
Reading Time: 1 minute

 

The Government of Japan is planning to launch the country’s casino management commission on January 7, 2020. The casino management commission will have five members. Their appointments require a confirmation from the country’s parliament and they will serve five-year terms.

The casino management commission is to be in charge of security matters, probity and background checks. The body will oversee integrated resort (IR) operators in that country, as well as devise measures to counter gambling addiction.

Japan is to allow a maximum of three resorts in the first phase of market liberalisation. The national government has yet to announce the full version of its so-called basic policy on IRs. Several prefectural governments and ordinance-designated cities in Japan have already shown interest in hosting an IR.

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Asia

Aruze Gaming Installs Super Big Wheel at City of Dreams

Niji Narayan

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Aruze Gaming Installs Super Big Wheel at City of Dreams
Photo Source: twitter.com
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Aruze Gaming has installed its Super Big Wheel at City of Dreams. The installation forms part of a new ETG zone at City of Dreams and is one of two new Aruze products to be deployed on the main gaming floor, alongside Lucky Roulette.

Super Big Wheel is an X station platform with dual LCD screens. Players can select any of the six coloured areas on the area bet screen to bet on the side game, which also offers a chance at winning a jackpot.

Lucky Roulette is an immersive new roulette game that features an automated roulette wheel with evocative dynamic projection imaging. The three-dimensional visual experience combines the appeal of a traditional roulette.

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