Baidu, Inc. (Nasdaq:BIDU), owner of China’s largest search engine, said Wednesday it has agreed to buy app store 91 Wireless for $1.85 billion to gain a greater share of the mobile user market.
Baidu's purchase of 91 Wireless from China’s NetDragon Websoft, Inc. (HKG:0777) is the Internet giant’s largest acquisition to date as well as the biggest deal in China’s IT sector.
The deal gives Baidu control over China’s most popular third-party store for smartphone apps as it tries to navigate the shift from desktop computing to mobile devices.
The two companies signed a memorandum of understanding to acquire 91 Wireless in mid-July for a merger consideration of $1.90 billion. After considering the conditional declaration of a special dividend totaling about $52.06 million by 91 Wireless to its existing shareholders, the price tag has now been adjusted to $1.85 billion.
Baidu expects to close the deal by the fourth quarter. “The acquisition of 91 Wireless significantly strengthens our mobile app distribution capability, and further enhances Baidu's prime position in China's thriving mobile ecosystem," CEO Robin Li said.
Following the completion of the deal, 91 Wireless will become a wholly-owned subsidiary of Baidu and will continue to operate under its existing management team as an independent company.
Baidu shares recently traded at $142.15 apiece. The company's shares have risen 42 percent since the beginning of the year, outperforming the Nasdaq Composite Index, which is up 22 percent in the same period.