July 16^th, Baidu announces the company has signed a memorandum of understanding to acquire 100% shares of 91 Wireless Websoft, a mobile app distribution company, from Netdragon Websoft Inc. The total valuation is $1.9 billion.

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According to the memorandum of understanding, Baidu will pay $1.09 billion for the 57.4% stake owned by Netdragon Websoft Inc. And Baidu will also buy the left shares held by other investors before August 14^th, 2013.   

Netdragon says the acquisition will improve profitability of Netdragon Websoft Inc. Meanwhile, if Baidu buys 91 Wireless, it will become more dominant in Wireless Internet area.

Once the acquisition is fully completed, the bid of Baidu purchasing 91 Wireless will exceed $1 billion, the amount of Yahoo investing in Chinese e-commerce site Alibaba in 2005. As a result, it will become the largest acquisition in the history of Chinese Internet.

91 Wireless was set up in September 2010. And 91 Wireless operates two popular app distribution platforms that collectively racked up more than 10 billion app downloads last year alone. Beyond that, 91 Wireless has a number of other valuable mobile products and a gigantic treasure trove of data on mobile user behavior, all of which could help Baidu dig in deeper in China's highly competitive mobile market. Currently, 91 Wireless is a highly influential smartphone service platform in China with products like 91 Mobile Assistant, Android Market, 91 mobile open platform and 91 Panda Reader.

Once the news was released, the share prices of Baidu and Netdragon have both increased by a large margin.