Youku (NYSE: YOKU) and Tudou (NASDAQ: TUDO), two of the leading China-born the U.S. listed online video site announced today that the two have reached a definitive agreement for Tudou to combine with Youku in a 100% stock-for-stock transaction. Victor Koo, founder and chief executive of Youku said that “the new company will have the reach and scale to bring users high quality content” while Gary Wang, founder and CEO of Tudou commented on the merger saying “ the new Youku Tudou Inc. will be able to provide the best-in-class experience for users interested in uploading, watching and sharing videos”.

The combination is expected to close in the third quarter of 2012.

It seems that the news took many people by surprise, Weibo users’ reactions were like “seriously? seriously? seriously?” or “Youku and Tudou? Now I’m believing in love again”.

It was a tough year last year for Chinese online video sites as costs of copyrighted content are ever rising. Youku and Tudou were constantly fighting with each other over copyright issue, both accusing each other of using each other’s exclusive content.