Baidu's $1.9 billion acquisition of 91 wireless

The largest amount of Chinese Internet purchases is about to be finalized. At 9:00 am on July 16, 2013, NetDragon Internet Co., Ltd. (SEHK Stock Code: 777) issued an announcement on the Hong Kong Stock Exchange that Baidu (NASDAQ: BIDU) had sold its holdings to Baidu for Baidu.com. Wireless Network Co., Ltd. (hereinafter referred to as “91 Wireless”) has entered into an MOU on all equity and Baidu will invest 1.9 billion U.S. dollars in the acquisition of 91 shares of wireless shares issued.

Baidu and NetDragon will further negotiate and reach an agreement on the relevant clauses of the offer. Finally, on August 14, 2013 (the final deadline), the company will sign the acquisition of 57.41% of the 91 wireless shares held by NetDragon. Given that Baidu intends to acquire the remaining 42.59% stake in 91 Wireless, before the final deadline, if other shareholders are willing to sell their holdings, Baidu will make the acquisition on the same terms as NetLong.

China's largest intention to finalize the Internet acquisition

The first time the news was released, the reporter called Tang Hesong, the general manager of the enterprise development department of Baidu responsible for investment and acquisition, and got his confirmation. According to the memorandum of understanding, after the success of this transaction, Baidu’s purchase of 91 Wireless will exceed the $1 billion in 2005 Yahoo’s acquisition of Alibaba, becoming the largest M&A case in the history of the Chinese Internet. 2013 was also an extremely active year for China’s Internet acquisitions. In the first half of this year, Alibaba purchased 186 million U.S. dollars in Sina Weibo, Baidu bought PPS for 370 million U.S. dollars, and Alibaba purchased Gaode 28 for 294 million U.S. dollars. The shares of % constitute a series of M&A booms in the Chinese Internet. Baidu M&A 91 Wireless will push this series of mergers and acquisitions to the top.

Baidu eventually signed an M&A deal with NetDragon. It was both expected and unexpected. Earlier this year, after the Alibaba Group announced a series of mergers and acquisitions investment activities, 91 wireless has also been repeatedly reported to be acquired by Alibaba. According to sources, the final minute after NetDragon announced that it had reached an agreement with Baidu, Alibaba continues to be in contact with NetDragon executives. Behind all kinds of rumors, it also shows that the 91 wireless acquisition, the parties compete for fierce competition.

Strong consolidation of mobile Internet portal

Analysis of the investment community, 91 wireless and Baidu itself has a strong business complementary features, Baidu acquired 91 wireless, will greatly consolidate Baidu mobile Internet portal status. The huge investment in the acquisition of all 91 wireless shares, fully reflects the vision and courage of Baidu management.

In the battle for new mobile Internet portals, Baidu took advantage of the technological advantages and platform advantages accumulated in the traditional PC Internet, and comprehensively laid out a composite portal based on search and application stores, making rapid progress. In terms of building search-based portals, as of April 2013, Baidu's mobile search daily active users exceeded 100 million. At the same time, the number of Baidu mobile search application Baidu APP monthly active users also broke 100 million, and the number of daily active users exceeded 2000. Million. In terms of portal construction based on the application store, Baidu mobile assistant has achieved full coverage on the PC and Android, ranking among the top three Android application stores in the Chinese market, and the distribution of APP has risen over 50% for three consecutive quarters.

On the basis of its rapid development, with 91 wireless, Baidu will be even more powerful, and its position in the mobile application store will be greatly strengthened. 91 Wireless was established in 2007. It is mainly engaged in the development and operation of 91 leading assistants and Andrews's two leading domestic smart phone application distribution platforms. In 2012, 91 wireless application downloads exceeded 10 billion. According to iResearch's 2011-2012 China Mobile Internet Development Industry Report, based on the number of users and the number of downloads, 91Wireless has become China's largest download channel for third-party applications.

Industry insiders believe that Baidu’s acquisition will have a huge impact on China’s mobile Internet industry. Baidu will directly satisfy users' various search and application download requests through search and application stores, and connect with massive developers to create a healthy and complete mobile Internet ecosystem. Baidu has firmly consolidated its position on the mobile internet chessboard.