Search giant Baidu have offered $1.9bn (£1.25bn) to purchase the entire share capital of a major Chinese app store, 91 Wireless. Should the deal be accepted, this would be the largest acquisition in the history of China's online sector.

Owned by Hong-Kong listed company NetDragon Websoft, 91 Wireless claim their Android and iOs platforms have yielded almost 13 billion downloads since 2007 and are the largest third-party distributor of apps in China.

China has the world's biggest population of Internet users, with 564 million people online by the end of 2012; but the usage of smartphoness, tablets and other wireless devices rose 18 % last year to 420 million. Baidu currently dominates 80% of China's search market, but is looking to strengthen and diversify its offering as the leading online brand through downloads - specifically music and apps.


According to the Financial Times:

 Baidu agreed to purchase the outstanding 42.59 per cent stake from 91 Wireless’s remaining shareholders on the same terms offered to NetDragon, taking the total price of the deal to $1.9bn – surpassing the $1bn Yahoo paid to acquire 40 per cent of online auction site Alibaba in 2005.
Private equity fund IDG owns 10.39 per cent of the company; Singapore’s Temasek holds 5.71 per cent through Vertex; and Richard Li, chairman of PCCW and the younger son of Asia’s richest man, Li Ka-shing, has 4.14 per cent through Pacific Century. David Wei, the former chief executive of Alibaba.com, is also a shareholder in 91 Wireless.


Upon news of the bid, NetDragon’s shares plummeted almost 18% to HK$19.88 in morning trading. Baidu needs to the agreement of other shareholders by a deadline of August 14th, or will be forced to pay a break-up fee of $50m to NetDragon.