Baidu has confirmed the acquisition of online video provider PPS for US$370 million, and will merge the company with its own video platform iQiyi to become China's largest online video platform.
In a statement issued Tuesday, Baidu said the transation is expected to close in the second quarter of 2013 and, upon completion, the PPS business will be consolidated into the former's financial statements.
PPS will be merged with iQiyi and will become the country's largest online video platform by the number of mobile users and video viewing time, it noted.
Gong Yu, CEO of iQiyi, said: "The merger of iQiyi and PPS' online video business is a major step toward consolidation in the industry and will contribute to the development of China's Internet video industry. The merger will generate significant synergies and will provide for an improved user experience as well as more and better content."
Following the merger, Gong will remain as iQiyi CEO, while PPS founder Zhang Hongyu and president Xu Weifeng will serve as co-presidents of the entity to be in charge of the PPS sub-brand and new business development, Baidu stated.
Rumors of the acquisition first surfaced last month, when unnamed sources said the acquisition would range between US$350 million and US$400 million and both companies will continue to be run as independent entities. Baidu declined to comment on the rumor then.