Baidu, Inc. (NASDAQ: BIDU), the leading Chinese language Internet search provider, today announced that it has entered into definitive agreements with certain investors relating to the divestiture of its financial service business, or Financial Services Group, which provides consumer credit, wealth management and other financial services. The investors are led by TPG and The Carlyle Group, with participation from Taikang Group, ABC International Holdings and others.

Pursuant to the definitive agreements, Baidu will divest a majority equity stake in FSG, which has been renamed as Du Xiaoman Financial (“Du Xiaoman”). Through the transaction, Du Xiaoman will raise approximately US$1.9 billion, among which Du Xiaoman will receive $840 million with the remaining balance used to purchase existing stake. Upon the completion of the transaction, Baidu will own approximately 42% of Du Xiaoman’s outstanding shares and will no longer have effective control over Du Xiaoman. Du Xiaoman will operate independently from Baidu and will enter into business cooperation arrangements with Baidu. Guang Zhu, Baidu Senior Vice President and General Manager of FSG, will become CEO of Du Xiaoman.

“I’m pleased to see the rapid growth Du Xiaoman has experienced since its inception in December 2015, to become a leading player in the FinTech space through innovation powered by AI,” said Robin Li, Chairman and CEO of Baidu. “This transaction marks another milestone for Baidu to incubate new businesses with large opportunities and strong synergies with Baidu’s core business, on the heels of iQiyi’s public listing.”

“In the coming age of FinTech, Du Xiaoman will leverage the technological capabilities of Baidu AI to partner with financial institutions and provide technology-driven, trustworthy financial services to consumers in China,” said Guang Zhu, CEO of Du Xiaoman.
The transactions contemplated under the definitive agreements are subject to certain closing conditions and are currently expected to close in the second half of 2018. Upon the completion of the transactions, it is expected that Du Xiaoman will be deconsolidated from Baidu’s consolidated financial statements.

About Baidu
Baidu, Inc. is the leading Chinese language Internet search provider. Baidu aims to make a complex world simpler through technology. Baidu’s ADSs trade on the NASDAQ Global Select Market under the symbol “BIDU.” Currently, ten ADSs represent one Class A ordinary share.