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Baidu Inc., owner of the largest search engine in China, has agreed to buy app store 91 Wireless for US$1.84 billion from NetDragon Websoft Inc., a Cayman Islands company listed on HKEx, and certain other shareholders.
According to NetDragon, 91 Wireless is the largest third-party distributor of apps in China by active users.
David Lamb, an M&A partner and Co-Chairman of Conyers Dill & Pearman based in Hong Kong, led a team from Conyers advising NetDragon and 91 Wireless. “The deal is innovative in that this is the first time that a Cayman incorporated HKEx listed company has used statutory merger provisions to effect a takeover, albeit in this instance the disposal of a non wholly owned subsidiary,” said Lamb. “This could transform the way takeovers are effected in Hong Kong as there are many advantages to the merger route as opposed to a more traditional scheme of arrangement or general offer.”
The transaction constitutes a very substantial disposal and a connected transaction and is subject to the approval of NetDragon’s independent shareholders. The deal is expected to close in September 2013.