This afternoon, Youku (NYSE: YOKU) and Tudou (NASDAQ: TUDO) announced that they would formally merge by 1% share exchange. After the merger, Youku shareholders and American Depositary Receipts holders will own about 71.5% of the shares of the new company, while Potato shareholders and American Depositary Receipts holders will own about 28.5% of the shares of the new company. The new company after the merger will be named Youku Tudou Inc Youku's American Depositary Receipts will continue to be traded on the new york Stock Exchange under the code YOKU. According to the terms of the agreement, from the effective date of the merger, all issued and circulating Class A common shares and Class B common shares of Tudou will be delisted, and each share will be converted into 7.177 Youku Class A common shares; Tudou ADS will be delisted and converted into 1.595 shares of Youku ADS. Tudou ADS is equivalent to 4 shares of potato Class B common stock, and Youku ADS is equivalent to 18 shares of Youku Class A common stock.

It is understood that after the strategic merger is completed, Tudou will retain the independence of its brand and platform and help strengthen and improve the video business of Youku Tudou. This strategic merger has been approved by the boards of directors of both companies, but the completion of the merger still depends on the usual transaction conditions, including the approval of shareholders of Youku and Tudou. Representatives of shareholders of both parties on their respective boards have promised to support the merger. The merger is expected to be completed in the third quarter of 212. It is reported that Goldman Sachs (Asia) Co., Ltd. and Allen &; Company LLC and Huaxing Capital as financial advisors of Youku, Allen &; Co. is a first-line investment bank in the United States, and has participated in Yahoo's acquisition and Facebook's listing. Huaxing Capital is the top investment bank in China, ranking first in the industry for three consecutive years. In 211, its transaction volume was nearly $3 billion, and in April 211, JD.COM Mall's C-round financing of $1.5 billion was also completed by it. The editor of Tencent Technology contacted Bao Fan (Weibo), Chairman and CEO of Huaxing Capital, and could not be contacted for the time being. Shida International Law Firm, Quanya Law Firm and Kangdeming Law Firm are the legal advisers of Youku in this transaction. Morgan Stanley Asia Limited is the chief financial advisor of Tudou, and Credit Suisse Securities is the joint financial advisor of Tudou. Kaiyi International Law Firm, Fangda Law Firm and Maipuda Law Firm are the legal advisers for this transaction of potatoes.