Chinese internet search engine Baidu has signed a definitive agreement with Renren, a real-name social networking Internet platform in China to acquire about 59% stake the Nuomi Holdings, a subsidiary of Renren for $160m in cash.
The deal is subjected to the closing conditions and is expect to be completed during the fourth quarter of 2013.
Baidu chief financial officer Jennifer Li said that Nuomi's sales coverage and customer base will be instrumental in helping the company build its LBS platform for local merchants.
"Nuomi's group-buying platform and high-quality local information clearly complement Baidu's existing mobile LBS and maps offering," Li added.
Renren chairman and chief executive officer Joseph Chen said that the company believes the group-buying business has tremendous potential in China and will continue to benefit from the rapid growth of the mobile Internet.
"Baidu's strategic investment will further enhance Nuomi's position in this sector and we are very excited about the synergies it creates," Chen said.
According to Fitch Baidu's acquisition of group-buying site Nuomi will help the company strengthening its mobile presence in mapping and location-based services for local merchants and boost the company's e-commerce business, complementing its existing advertisement business.
The rating agency said Nuomi ranks as one of China's top group-buying sites, and has 3.8 million active paying users and it generated $120m revenue in Q213.
Established in 1957, BCS, The Chartered Institute for IT, promotes wider social and economic progress through the advancement of information...