Alibaba-Backed Online Food Delivery Firm Is on the Verge of Acquiring Baidu's Rival Take-Out Ordering Business
Zhao Chenting
/SOURCE : Yicai
Alibaba-Backed Online Food Delivery Firm Is on the Verge of Acquiring Baidu's Rival Take-Out Ordering Business
(Yicai Global) Aug. 24 --, internet-based popular food delivery company backed by China's e-commerce giant Alibaba Group Holding Ltd. [NYSE:BABA] and owned by Shanghai Lazhasi Information Technology Co., will finally acquire its rival, search engine giant Baidu's take-out delivery business. Alibaba Group [NYSE:BABA] the controlling shareholder of /n/n/n/n/n Yicai Global exclusively reported on Aug. 21 that would announce buyout of Baidu's take-out delivery business th week despite the company remained silent on the deal.  Once the deal finalized, Baidu will hold shares in and also receive some cash. Yicai Global's exclusive report three days ago also indicated that Baidu's take-out delivery business would still operate independently under the current brand for about one year even after the takeover deal.

The two parties held prolonged dcussions over the deal. Some media reports said CEO Zhang Xuhao led a business team to vit Beijing for negotiations in June.

As the top three meal delivery services in China's take-out market, Meituan Waimai, and Baidu's take-out delivery business grab a huge chunk of the market share. But, after the deal, Meituan and will be the only two important players in the market.

In 2015, Alibaba held 27.7% stake in with the investment of USD1.25 billion, becoming the largest shareholder in the company. Bloomberg reported Alibaba Group and its financial arm Ant Financial Services invested at least another USD1 billion in in May 2017. The insiders believe that th investment provided necessary funds for the acquition of Baidu's take-out delivery business.

To prevent the rival Meituan from operating its own payment business and targeting Alipay business, Alibaba's investments in the catering market focus on payment rather than the catering business. The online-to-offline (O2O) catering service market pattern has been establhed right after Meituan acquired Dazhong Dianping half year ago, e-commerce analyst Li Chengdong commented.

"Both Meituan and will continue with their integration strategies in the next one to two years. By then, one company expected to hold a monopoly position in China's take-out market, just like Didi Chuxing in the ride-hailing market," Zhu Yue, executive director of the China Insights Consultancy, told Yicai Global.

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Keywords: M&A , Alibaba , Baidu , Meituan , Ele.Me , O2O , E-COMMERCE , Take-Out Delivery