Didi Chuxing To Acquire Uber’s China Operations

Didi Chuxing To Acquire Uber’s China Operations

The leading ride-hailing service in China, Didi Chuxing, will be acquiring the Domestic operations of Uber Technologies Inc., revealed sources familiar with the transaction. The acquisition will put an end to the fight going on between the two companies, which were contending to attract customers and drivers. The competition was proving to be expensive for both the companies.

Subsequent to the acquisition of Uber’s Chinese subsidiary, the value of Didi’s business will be $35 billion, according to sources who maintained anonymity since the details have not been made public yet. The sources also revealed that Didi will give 20% stake in the combined company to Uber China, a subsidiary of San Francisco-based Uber, Baidu Inc. and others. For now, Uber will be using its own app in the country.

In addition to acquiring Uber China, the deal also entails an investment of $1 billion in Uber by Didi, sources disclosed. Didi and UBer did not give any comments on the matter. “As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. I have no doubt that Uber China and Didi Chuxing will be stronger together”, wrote the Chief Executive Officer of Uber Travis Kalanick, in a blog post.

The leading ride-hailing companies of China, Didi and Kuaidi, merged in 2015, resulting in the formation of Didi Chuxing, which emerged as the domestic powerful and overwhelming force. The merged entity was jointly backed by the two primary internet businesses in China, Alibaba Group Holding Ltd. and Tencent Holdings Ltd.

Furthermore, the joint venture attracted an investment of $1 billion from Apple Inc. in 2016. The ride-hailing operations received further boost and opportunities of expansion after a new legislation got sanctioned last week by the government of China, making ride-hailing services legal.