Chinese search engine giant Baidu Inc (ADR) (NASDAQ:BIDU) has acquired a minority stake in the U.S. taxi-hailing service Uber Technologies. It’s a big boost to the cab-booking app as it expands in China. The acquisition was first reported by China National Radio. Baidu will give Uber cash and non-cash assets, including its online resources.

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Uber needed a local player like Baidu

Sources familiar with the matter told Bloomberg that the Beijing-based company is investing $600 million in Uber. The investment will give Baidu a slice of the fast-growing taxi-hailing service in China, which is currently dominated by firms backed by Tencent Holdings and Alibaba. Earlier this week, Chinese taxi-hailing app Didi Dache raised $700 million from Tencent Holdings, Temasek Holdings and DST Global.

Baidu will officially announce the investment on Dec.17 at a press conference. RHB Research Institute analyst Li Yujie said Uber needed a local player like Baidu that fully understands the Chinese market. The relationship will be mutually beneficial. Baidu is looking to promote its mobile payment platform ‘Baidu Wallet.’ Uber would help it receive more traffic.

Uber facing hurdles in many countries

Earlier this month, Uber raised $1.2 billion in its latest funding round that valued the U.S. startup at $40 billion. Since its inception in 2009, Uber has raised $2.5 billion. The company said at the time of its recent funding that it could raise another $600 million if other investors joined the funding round at a later date. Uber is expanding aggressively in international markets.

In China, Uber will initially start operations in 14 cities. The U.S. startup has faced a number of regulatory and legal hurdles in many countries. Its services were halted in Spain and Thailand over regulatory issues. It was banned in India after an Uber driver was accused of rape, which sparked massive protests.

Baidu shares fell 0.45% to $228.20 in pre-market trading Friday.