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Uber Rival Didi to Buy Uber China arm, Form $35Bn Juggernaut • Mirror Daily

(Mirror Daily, United States) – Sources familiar with the matter said Beijing-based Didi Chuxing would purchase Uber Technologies’ local operations to create a conglomerate that will be valued at $35 billion. The merger is a happy ending to a bitter fight between the two companies for dominance on the Chinese ride-hailing market.

People who disclosed the deal asked the media to keep their identity secret as the information is not yet public. Under the new deal’s terms, shareholders of Uber China’s stocks will be granted a 20 percent stake in the rival company when the merger is complete.

Uber’s Chinese subsidiary, which is mostly owned by Uber and Chinese web services firm Baidu, announced that it would continue to do business through its own app in the country for the moment.

Under the terms of the deal, Didi must invest $billion in Uber, sources said. Didi has yet to reply a request for comment, while Uber declined to comment. However, in a recent blog post, Uber founder Travis Kalanick said his gut instinct tells him that the two companies “will be stronger together.”

Kalanick added that from his experience as a businessman he learned that a successful business is based on decision made with one’s head and heart.

In 2014, Didi merged with another rival Kuaidi, which also led the ride-sharing business in China. Under that deal, Didi’s and Kuaidi’s top investors Tencent Holdings Ltd. and Alibaba Group Holding Ltd. were brought under the same roof.

Apple joined Didi’s this year with an $1 billion investment in a bid to convince Beijing take a softer stance on its apps and technologies. Yet, since last week Chinese lawmakers passed new legislation to regulate ride-hailing services within the country, the business is expected to grow even more.

In the meantime, Uber’s China operations were not as fortunate. Several investors urged the company to sell off its China business. Uber’s war against Didi cost the U.S. company over $2 billion. Uber remains profitable in other countries in the developing world, sources said.

Kalanick acknowledged that both his firm and rival Didi have been investing billions of dollars in the Asian country but they have yet to see any profit there. Uber boss added that profitability is the key factor to a sustainable business model that can benefit riders, drivers, and municipalities in the long run.
Image Source: Wikimedia

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