By Jon Russell
Baidu has turned to the financial industry to bolster its consumer finance business. The Chinese search giant confirmed that it has sold a majority share in its Financial Services Group (FSG) business to a consortium of private equity firms in a deal worth $1.9 billion.
The business is in the consumer finance space and its services include credit and wealth management. Its competition, beyond traditional financial businesses, includes digital efforts from the likes of Tencent and Alibaba.
The deal — which had been speculated at the end of last year — sees FSG renamed to Du Xiaoman. The group of investors is led by TPG and The Carlyle Group, and it will pay around $1.06 billion for a majority stake. A further $840 million will be given to Du Xiaoman.
Following the transaction, Baidu will own 42 percent of the business, which will operate independently. Guang Zhu, who had been Baidu senior VP and GM of FSG, will become Du Xiaoman CEO.
It’s fairly common for China’s tech giants to incubate business which, when ready, are they spun out to raise capital from segment-specific investors. Indeed, JD.com — Tencent’s e-commerce partner — brought in a range of …read more
Source: Tech Crunch