Uber merges Chinese branch with local counterpart Didi Chuxing
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]S[/dropcap]an Francisco-based ride-hailing giant Uber Technologies Inc. will merge its operation in China with local archrival Didi Chuxing Technology Co., media reported on Monday.
Didi will buy Uber China in a deal that values the combined company at 35 billion U.S. dollars, in which Uber China will hold a 20 percent stake, according to Bloomberg on Monday, citing sources familiar with the matter.
Meanwhile, Didi will make a 1-billion-U.S.-dollar investment in Uber Global, the sources said.
A blog post that Bloomberg said obtained from Travis Kalanick, the chief executive officer of Uber, gave a hint of the merger.
” “Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term,” wrote Kalanick.
Didi confirmed the deal later on Monday, saying that Didi and Uber Global will become each other’s minority stockholders and both heads will join the other’s board of directors.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he deal marks an end of the fierce business war in China’s fast-growing ride-hailing market. Both companies have spent tens of millions of dollars in China to attract users in the past year.
Uber, since it entered the Chinese market in 2013, has lost more than 2 billion dollars, according to a source to Bloomberg.
The merger came after China granted legal status to ride-hailing services last week, when the State Council released a document featuring guidelines on the registration and operation of on-demand mobility services, allowing qualified private cars and drivers to join the party.
Uber will continue to operate under its own app in China, according to Bloomberg.
(This story has not been edited by PGurus.com and is auto–generated from a syndicated feed we subscribe to.)
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