Baidu Inc. agreed with a number of investors to divest a majority equity stake in its global ad and tools business, or Global DU business.
The Chinese search giant will no longer have effective control over Global DU business upon completion of the deal and will be left with 34% of the latter's outstanding shares, the company said May 21.
"Upon this divestiture, the Global DU business will have more autonomy and agility in its operation and will receive a cash injection to further support the growth of its business," Baidu CFO Herman Yu said.
The transaction allows Baidu "to sharpen its focus on AI-powered core businesses, on the heels of the divestiture of Baidu's financial services business," Yu added.
The deal, subject to certain closing conditions, is expected to close by the third quarter of 2018. The Global DU business will be deconsolidated from Baidu's consolidated financial statements once the transaction has been completed. Financial details of the transaction were not disclosed.
Last month, Baidu raised approximately US$1.9 billion for the spinoff of its financial services division Du Xiaoman Financial.
In February, the company's streaming service iQIYI Inc. filed for an initial public offering in the U.S., which it priced in late March with a total offering size of US$2.25 billion.
