Baidu plans to unload US$1 billion of shares in Ctrip, reducing its stake in Chinese travel site by a third
- Baidu over the past years has sold its food-delivery arm to Alibaba’s Ele.me, and merged its music streaming service with Chinese record label Taihe
Baidu is selling about a third of its stake in online travel site Ctrip.com International, generating around US$1 billion to counter a slowing economy amid intensifying competition in its key advertising business.
Ctrip on Thursday announced a proposed secondary offering of 31.3 million American depositary shares held by Baidu. That represents around 30 per cent of its stake in Ctrip and is equivalent to around US$1 billion according to Ctrip’s current share price.
Baidu will remain Ctrip’s largest shareholder. It owned a 19 per cent stake in the company after exchanging its shares in rival travel service provider Qunar in 2015. The share swap created China’s biggest online travel agency, putting a halt to a cash-burning price war.
The proceeds will come in handy for the Beijing-based company. “Baidu may use the cash to meet its operational needs as its near-term sales falter amid macroeconomic and competitive pressures,” Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam wrote in a research note on Thursday.
Baidu over the past years has sold its food-delivery arm to Alibaba Group Holding’s Ele.me, and merged its music streaming service with Chinese record label Taihe, allowing the search giant to focus on its key units such as advertising, smart speakers and autonomous cars.