China:Two online video giants to merge

Two of China’s largest online video firms, Youku and Tudou, are to merge following shareholder approval.

Youku will acquire Toudu through a stock swap deal worth $1bn. Following the merger, the two companies will remain separate in terms of branding and web style and each will self-produce some of their own content but they will also benefit from combined departments in other areas including technology and public relations.

The merger was originally announced in March and is expected to cut costs for the two firms of up to $60m in areas including copyright, bandwidth and server purchases.

Both companies have recently reported net losses which this deal should address. In their most recent quarterly reports, Youku and Tudou reported net losses of $9.9m and $24.3m respectively.