China’s Baidu to Acquire Mobile App Firm for $1.9 Billion
The Internet search giant, known as China's Google, expands its reach in the mobile phone market via the planned purchase of 91 Wireless.
HONG KONG – China’s leading online search provider Baidu has moved to strengthen its presence among mobile phone users, unveiling that it has agreed to take over mobile app store operator 91 Wireless in a deal estimated to be worth $1.9 billion.
In a statement on Tuesday, Nasdaq-listed Baidu announced it would acquire a 57.41 percent majority stake in the company, presently owned by Hong Kong-listed NetDragon Websoft.
The company, sometimes referred to as China's Google, also said it “intends to purchase the remaining equity interests in 91 Wireless from other shareholders based on terms and conditions similar to those offered to NetDragon.”
The deal is believed to be Baidu's biggest acquisition ever.
Baidu had an 82 percent share of online searches via desktops in China as of March 31, but its mobile app reached only 9 percent of the nearly 1.2 billion wireless subscribers in the country, according to Bloomberg News.
The deal will see Baidu acquiring what NetDragon has described, using statistics from research firm iResearch, as the biggest third-party distribution platform of smartphone apps in China. 91 Wireless’ apps marketplace has generated 10 billion downloads since the company was founded in 2007.
The deal signals a heightened focus among China’s Internet service providers on gaining a foothold in the country’s vast market of mobile users. Baidu’s move follows e-commerce giant Alibaba’s recent investment in online portal Sohu.com.
Baidu in May acquired the online video business of Internet video provider PPS for $370 million.