Recruitment Leader 51.com to Take Charge of Lagou

Major online recruitment site 51job Inc. said it will buy a majority stake of rival Lagou Information Ltd. in a move to consolidate the industry.

Shanghai-based 51.job will pay $119 million for 60% of Lagou, a 4-year-old website that specializes in jobs in the technology and engineering sectors. The deal is expected to close in the fourth quarter, 51job said in a statement released after U.S. markets closed on Thursday.

“The addition of the Lagou platform further expands and deepens 51job’s (human resources) services ecosystem for both employers and job seekers alike,” 51job CEO Rick Yan said. “(By) combining Lagou’s targeted strengths in the technology vertical with 51job’s extensive sales resources and large user base, we are excited about opportunities to enhance the recruitment experience and improve hiring effectiveness in this important industry segment.”

Following the cash injection, Lagou plans to make a New York IPO in 2019, Chairman Xu Dandan told web portal Sina.com.

China’s fragmented recruitment market is starting to consolidate, with 51job emerging as one of the major players. The largest company, 58.com Inc., is often called “the Craigslist of China” and two years ago purchased ChinaHR, the former China business of U.S. recruitment giant Monster.com. Another big player, Zhaopin Ltd., is in the process of trying to privatize from the New York Stock Exchange.

Some of China’s smaller recruitment sites have come under scrutiny recently, following several cases in which young people were later found dead after answering ads on such sites for jobs that turned out to be part of pyramid schemes or other scams.

Those cases prompted the ministry in charge of human resources last month to say website operators can be shut down if they let unlicensed companies post material as part of help-wanted scams.

It added that operators can have their business licenses revoked or face criminal charges if job seekers have their personal rights violated or suffer losses after responding to posted job offers.

Contact reporter Yang Ge (geyang@caixin.com)