Motorcycles for take-out delivery service of Ele.me, stop outside a residential district in Beijing, May 5, 2017. [Photo/VCG]

Baidu Inc is close to finalizing a deal to sell its food delivery business, Baidu Waimai, to rival Ele.me, financial magazine Caijing reported on Sunday.

If everything goes smoothly, the deal will be announced within two or three weeks.

This news comes two months after media reported that Baidu Waimai was talking with China's leading delivery company SF Express.

According to reports, the two companies planned to establish a new company to operate the food delivery business. However, the two sides could not reach a consensus on price and conditions, and negotiations broke down.

Currently Baidu Waimai and Ele.me have reached a verbal agreement, Caijing said. After the deal, Baidu will hold shares in Ele.me, however, the figure has not been released.

In a previous interview in Caijing magazine, Baidu CEO Robin Li said Baidu Waimai needs innovation. "If it cannot beat other competitors, then drop it; a decision must be made," he said in the interview.

According to a report released by TrustData in May, Meituan Waimai, Ele.me and Baidu Waimai were the leaders in the domestic online food delivery market, with a monthly coverage rate of 1.23 percent, 0.97 percent and 0.2 percent respectively.

Also, an Alibaba executive told the magazine that Alibaba plans to take full control of Ele.me, and negotiations are currently underway. In 2015, Alibaba invested $1.25 billion in Ele.me, becoming the largest shareholder with a 27.7 percent stake.