China’s Baidu to sell majority of financial services unit for $1.9 billion

HONG KONG: China’s Baidu Inc said it will sell a majority stake in its financial services business for about $1.9 billion to a consortium led by TPG Capital Management LP and Carlyle Group LP, as it looks to deepen its push into financial services.

The investment will give Baidu the firepower it needs to narrow the lead that Alibaba Group Holding Ltd and Tencent Holdings Ltd have taken in financial services, and also to find revenue streams outside its internet search business.

The deal provides foreign investors with a significant indirect stake in a number of lucrative onshore financial service businesses and comes as the government opens up China’s financial sector to more foreign investment.

The Baidu deal adds to a flurry of fundraising activity by Chinese technology firms including Ant Financial Services Group and JD.com Inc’s finance arm, which are keen to respond to burgeoning demand for digital services, especially in the financial sector.

The deal is expected to close in the second half of the year and values Baidu’s Financial Services Group (Baidu FSG) at nearly $4 billion, said one person with direct knowledge of the matter.