(Yicai Global) June 28 -- Two of China's biggest platforms for live-streaming, Huajiao and 6.cn are to come together in a merger deal worth between CNY3.4 billion (USD515 million) and CNY5.1 billion.

Beijing Mijinghefeng Technology, the operator of Huajiao, will buy 6.cn from its Hangzhou-based parent Songcheng Performance Development, according to a statement.

The merger is part of increased consolidation efforts within the Chinese live-streaming sector, which has seen recently seen viewer numbers fall following explosive growth in the preceding years, data from tech consultancy iResearch shows. Monthly active user figures hit an all-time high last November at 141 million before falling to 107 million this March.

With a user base of around 140 million, Mijinghefeng posted an operating revenue of CNY2.4 billion in 2017, losing CNY141 million annually.

Songcheng Performance Development acquired a 100% equity stake in 6.cn for CNY2.6 billion in March 2015. The platform posted CNY162 million, CNY230 million and CNY285 million in net income in 2015, 2016 and 2017, respectively, thus becoming an indispensable part of Songcheng Performance Development.

Songcheng Performance intends to transfer part of 6.cn's stock to third-party investors in a bid to optimize its equity structure, a source revealed. Upon closing of the transfer, Songcheng Performance's shareholding ratio will be less than 30% in the restructured company.

Chinese internet security giant Qihoo Software will also hold 27.1% equity in the restructured company after accepting the transfer, while the Beijing Cultural Center Fund and Hunan Broadcasting System Group's Mango Cultural Creativity Fund have also subscribed to stock equity.

Editor: William Clegg