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Acquisitions | 12 Months Ended
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Dec. 31, 2022
Acquisitions |
Acquisitions |
25. | Acquisitions
Transactions with Chaodian Prior to 2020, the Group held 63.6% of equity interest in Chaodian. In September 2020, the Company acquired the rest of noncontrolling interests of Chaodian, with the total consideration of RMB744.6 million including with a cash consideration of RMB250.5 million and 1,731,100 Class Z ordinary shares. The consideration was determined by referenced to a third-party valuer’s valuation. The difference between the total consideration and the carrying value of the noncontrolling interest of Chaodian was recognized as additional paid-in capital, amounting to RMB193.3 million. Following the completion of this transaction, the Company held 100% of equity interest in Chaodian. Transactions with one animation content production company (“Anime Business”) Prior to 2021, the Group held 8.1% equity share of Anime Business through several investments with preferred rights, which was accounted for as long-term investments using alternative measure method. In January 2021, the Group acquired remaining equity with the total consideration of RMB612.3 million, including the cash consideration of RMB369.1 million and 400,000 restricted Class Z ordinary shares. Upon the completion of this transaction in January 2021, the Group held 100% of equity interests in the Anime Business, which became a consolidated subsidiary of the Group. The consideration of acquisition of Anime Business was allocated based on their fair value of the assets acquired and the liabilities assumed as follows:
|  | Amount |  |  | Amortization Period |
|  | RMB in thousands |  |  |  |
Net assets acquired |  |  | 189,763 |  |  |  |  |
Intangible assets |  |  |  |  |  |  |  |
—Brand |  |  | 85,000 |  |  |  | 8 years |
—Vendor relationship |  |  | 75,000 |  |  |  | 10 years |
—Non-compete clause |  |  | 54,000 |  |  |  | 6 years |
Goodwill |  |  | 283,402 |  |  |  |  |
Total |  |  | 687,165 |  |  |  |  |
Total purchase price comprised of:
|  | Amount |  |  |
|  | RMB in thousands |
Cash consideration |  |  | 369,124 |
Share consideration |  |  | 243,203 |
Fair value of previously held equity interests |  |  | 74,838 |
Total |  |  | 687,165 |
Goodwill arising from this acquisition was attributable to the synergies between ability of animation content production and the Group’s strategy to expand its content library. Transactions with one Comics distribution company (“Comics Business”) In November 2021, the Company signed an agreement to acquire all of the equity interests in Comics Business with a total cash consideration of RMB600.0 million. Upon the completion of this transaction, the Group held 100% of equity interests in the Comics Business, which became a consolidated subsidiary of the Group. The consideration of acquisition of Comics Business was allocated based on their fair value of the assets acquired and the liabilities assumed as follows:
|  | Amount |  |  | Amortization Period |
|  | RMB in thousands |  |  |  |
Net assets acquired |  |  | 48,764 |  |  |  |  |
Intangible assets |  |  |  |  |  |  |  |
—Brand |  |  | 23,000 |  |  |  | 10 years |
—User base |  |  | 11,000 |  |  |  | 3 years |
—Copyrights |  |  | 269,000 |  |  |  | 8 years |
—Technology |  |  | 4,000 |  |  |  | 3 years |
—Non-compete clause |  |  | 5,000 |  |  |  | 2 years |
Deferred tax liabilities |  |  | (42,133 | ) |  |  |  |
Goodwill |  |  | 281,369 |  |  |  |  |
Total |  |  | 600,000 |  |  |  |  |
Total purchase price comprised of:
|  | Amount |
|  | RMB in thousands |
Cash consideration |  |  | 600,000 |
Goodwill arising from this acquisition was attributable to the synergies between ability of comics distribution and the Group’s strategy to expand its content library. Transactions with one game development company (“Game Business”) In February 2022, the Company signed an agreement to acquire all of the equity interests in Game Business with a total cash consideration of RMB 800.0 million. Upon the completion of this transaction, the Group held 100 % of equity interests in the Game Business, which became a consolidated subsidiary of the Group. The consideration of acquisition of Game Business was allocated based on their fair value of the assets acquired and the liabilities assumed as follows:
|  | Amount |  |  | Amortization Period |
|  | RMB in thousands |  |  |  |
Net assets acquired |  |  | 333,830 |  |  |  |  |
Intangible assets |  |  |  |  |  |  |  |
—Non-compete clause |  |  | 111,000 |  |  |  | 6 years |
—Others |  |  | 50,965 |  |  |  | 5 years |
Deferred tax liabilities |  |  | (40,491 | ) |  |  |  |
Goodwill |  |  | 344,696 |  |  |  |  |
Total |  |  | 800,000 |  |  |  |  |
Total purchase price comprised of:
|  | Amount |
|  | RMB in thousands |
Cash consideration |  |  | 800,000 |
Goodwill arising from this acquisition was attributable to the Group’s strategy to expand its self-developed capacity in game development. Other acquisitions For the years ended December 31 , 2020 , 2021 and 2022 , the Group completed several other acquisitions, to complement its existing businesses and achieve synergies. The acquired entities individually and in aggregate were insignificant. The Group’s other acquisitions are summarized in the following table:
|  | For the Year Ended December 31, |  |  | Amortization Period |
|  | 2020 |  |  | 2021 |  |  |  |  | 2022 |
|  | Amount |
|  | RMB in thousands |  |  |  |
Net assets acquired |  |  | 18,495 |  |  |  | 28,320 |  |  |  |  |  | 85,369 |  |  |  |  |
Intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
—Brand |  |  | — |  |  |  | 66,000 |  |  |  |  |  | — |  |  |  | 5 years |
—Customer relationship |  |  | — |  |  |  | 83,000 |  |  |  |  |  | — |  |  |  | 5 years |
—Non-compete clause |  |  | — |  |  |  | 28,000 |  |  |  |  |  | 9,000 |  |  |  | 6 years |
—Others |  |  | 160,636 |  |  |  | 71,100 |  |  |  |  |  | 61,000 |  |  |  | 1 to 10 years |
Deferred tax liabilities |  |  | (49,140 | ) |  |  | — |  |  |  |  |  | (17,500 | ) |  |  |  |
Goodwill |  |  | 283,760 |  |  |  | 477,746 |  |  |  |  |  | 42,131 |  |  |  |  |
Total |  |  | 413,751 |  |  |  | 754,166 |  |  |  |  |  | 180,000 |  |  |  |  |
Total purchase price comprised of:
|  | For the Year Ended December 31, |  |  |
|  | 2020 |  |  | 2021 |  |  |  |  | 2022 |
|  | Amount |
|  | RMB in thousands |
Cash consideration |  |  | 295,323 |  |  |  | 244,949 |  |  |  |  |  | 150,000 |
Share consideration |  |  | 118,428 |  |  |  | 391,244 |  |  |  |  |  | — |
Fair value of previously held equity interests |  |  | — |  |  |  | 117,973 |  |  |  |  |  | 30,000 |
Total |  |  | 413,751 |  |  |  | 754,166 |  |  |  |  |  | 180,000 |
Pro forma results of operations for all the acquisitions have not been presented because they were not material to the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020, 2021 and 2022, either individually or in aggregate.

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