Shanda buys Ku6

Nasdaq-listed Shanda Entertainment plans to acquire Beijing-based online video site Ku6.com through shares of a Shanda subsidiary in a US$44 million deal, industry sources said yesterday.

It was the first merge and acquisition case in the Chinese video Website industry, which has struggles years for profitability, industry insiders said.

Shanda will acquire Ku6.com through a share swap through its listed subsidiary Hurray! Holdings. The deal, valued at US$44 million, was signed a week ago, sina.com reported yesterday, without providing more details.

Both sides declined to comment yesterday.

"We welcome the deal if it really happens. It represents the value of video Website and will boost the industry development in China," Wang Wei, a major Website chief executive, said yesterday.

Ku6 has spent several months seeking buyers because the video Website market is now dominated by two or three players including Tudou.com and Youku.com, industry officials said.

A separate source, who declined to be identified, said Shanda intended to announce the Ku6 acquisition around November 28, to mark the company's 10th anniversary.

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