Baidu to sell takeout delivery business to Alibaba

Baidu is selling its takeout delivery business to Ele.me, a rival backed by Alibaba, people familiar with the situation told The Wall Street Journal. The cash-and-stock deal, which is expected to be announced later this week, will help the Chinese search-engine giant stop sinking money into a costly business that hasn’t paid off, according to people familiar with the sale. Ele.me is valued at $5.5 billion to $6 billion after its latest investment round led by Alibaba and its financial affiliate, Ant Financial. As of last year, Baidu’s takeout business, called Waimai, was valued at $2.5 billion. The people didn’t provide details on a purchase amount. Alibaba and Ant are helping fund the acquisition, one of the people said. Waimai shareholders will hold a minority stake in the combined entity as a result of the deal, one of the people said.