By Dominic Chopping

 

STOCKHOLM--Shares in Modern Times Group AB (MTG-B.SK) rose as much as 25% Monday after the Swedish e-sports and gaming company announced a tie-up between its Turtle Entertainment e-sports business and Chinese live streaming platform Huya Inc. (HUYA) to facilitate expansion into China.

Modern Times Group and Tencent Holdings Ltd. (0700.HK)-backed Huya will form a joint venture, with Huya buying a $30 million stake in Germany-based Turtle Entertainment, known as ESL.

Modern Times Group owns 82.5% in ESL and Monday's deal gives the whole of ESL an enterprise value of $425 million.

ESL will also issue new shares at a value of $22 million to increase capital to be used for further expansion.

Earlier this year, Modern Times Group spun off its media and entertainment business to focus solely on gaming and e-sports. In its statement Monday, it said the Chinese esport market in 2019 is expected to generate revenues of $210 million, overtaking Western Europe as the second-largest esport region globally in terms of revenues.

ESL and Huya said they 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.

"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," Modern Times Group Chief Executive Jorgen Madsen Lindemann said.

 

Write to Dominic Chopping at dominic.chopping@wsj.com; @domchopping @WSJNordics

 

(END) Dow Jones Newswires

September 02, 2019 09:05 ET (13:05 GMT)

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