Chinese livestreaming platform Huya and Swedish media firm Modern Times Group (MTG) have entered into a binding term sheet.

The agreement includes a joint venture with MTG portfolio company Turtle Entertainment GmbH (ESL), which Huya will be allowed to acquire a minority stake in.

ESL will issue new shares at a value of $22M USD to increase capital for further expansion, and to fund its pro-rata part of the ESL/Huya joint venture company.

MTG will expand into the Chinese esports market through a binding term sheet with livestreaming platform Huya. The strategic partnership will include a new joint venture company with MTG portfolio company ESL, of which Huya will be able to acquire a minority interest in.

Through the joint venture, ESL and Huya are looking to host and build local Chinese esports competitions, which will be linked into ESL’s global tournament calendar. Huya will acquire $30M worth of primary and secondary shares in ESL, at a pre-money enterprise value of $425M. As part of the deal, ESL will issue new shares at a value of $22M to increase capital to be used for further expansion.

“We are pleased to establish a close partnership with ESL, which demonstrates Huya’s further penetration into the global esports sector. Together with ESL, we are thrilled to bring more world-class global esports content to Chinese gaming enthusiasts,” says Huya CEO Rongjie Dong.

This agreement marks ESL’s first new shareholder since MTG’s initial investment in the company in 2015. The news follows a recent announcement that ESL would host an Intel Extreme Masters tournament in Beijing-Haidian in November, and media partnerships throughout the year between Huya and western esports companies, including Team Liquid and ESL. Listed on the New York Stock Exchange, Huya is also minority-owned by Tencent Holdings, with the ESL investment now linking the two companies.