(Yicai Global) Aug. 25 -- Ele.me, the vastly popular internet-based food delivery company backed by China's e-commerce giant Alibaba Group Holding Ltd. [NYSE:BABA] and owned by Shanghai Lazhasi Information Technology Co., has confirmed plans for the acquisition of internet giant Baidu Inc.'s [NYSE:BIDU] take-out delivery service platform, Baidu Waimai, in an open letter issued yesterday.
Baidu Waimai will still operate independently post-merger, with Ele.me inputting capital, traffic, manpower and other resources in the future, said Zhang Xuhao, chief executive of Ele.me.
The deal's value will total around USD500 million, according to market information estimates. Ele.me will also purchase associated web traffic services from Baidu's maps, mobile and search engine providers for around USD300 million.
Beijing Sankuai Online Technology Co.'s Meituan-Dianping, China's biggest group deals website and food delivery service platform, held a 45.2 percent share of the country's take-out market as of July. Ele.me and Baidu Waimai hold 36.4 percent and 6.3 percent shares, respectively, Trustdata information show.
Alibaba Group became Ele.me's largest shareholder in 2015 through a USD1.25 billion deal for 27.7 percent of the company's shares. The e-commerce giant also invested another USD1 billion in the platform in May 2017, providing capital for the Baidu Waimai acquisition, market insiders say.