China based web services provider Baidu has signed an agreement to buy the NetDragon Websoft’s subsidiary 91 Wireless Websoft for $1.9bn, which is a mobile app store.
The transaction is Chinese search giant’s second Android app store and is expected to expand its footprint in the gaming business.
Following the acquisition, NetDragon will develop its online game business as well as increase investment in the field of mobile games and increase its growth opportunity projects by improving its internal R&D capabilities with financial resources.
Baidu chairman and chief executive officer Robin Li said, "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."
NetDragon chairman and executive director Liu Dejian said with the new financial resources the company will consolidate its leading position in the online game segment and explore new opportunities with high growth potential.
"I am convinced that after the transaction, NetDragon will advance to a new stage of development with a brilliant outlook, and that the management of NetDragon will continue to create optimal value for the Company’s shareholders," Dejian added.
As part of the agreement, the NetDragon, which holds 57.41% share in 91 Wireless, will share the part of the amount among its minority shareholders as well as partly invest in the mobile game business.
Baidu said in the month of July 2013, Baidu and 91 Wireless users in China together downloaded 69 million apps daily, out of which large number of apps were downloaded directly from mobile devices.
91 Wireless CEO Joe Wu said the company has built up a broad and loyal developer base over the years, and synergies with the Baidu platform, like access to Baidu’s vast traffic resources and sophisticated cloud infrastructure, should accelerate its already impressive growth.
"Moreover, their expertise in big data analytics and search will allow us to significantly enhance the user experience," Wu said.
