 "Uber")
In a move that marks the end of intense rivalry in the ride-hailing market in China, Uber Technologies will merge its Chinese business with Didi Chuxing, news agency Bloomberg reported on Monday. Didi is the dominant app-based taxi aggregator in the country.
The valuation of the combined entity is $35 billion, the report added, citing people familiar with the development.
As per the new structure, investors in Uber China — a company owned by Uber and other investors — will have 20% stake in the merged firm.
Meanwhile, Didi will be making an investment of $1 billion in Uber at a valuation of $68 billion.
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” Travis Kalanick, chief executive officer of Uber, wrote in a blog post
What happens next?
Uber will exit operations in China — a battle lost of some sort — but will still have a key stake in the biggest company there.
Intense rivalry
Both the companies, until recently, were spending heavily to gain market share in China. However, this was affecting the performance of the companies, as both entities were yet to turn profitable. In fact, Uber had lost more than $2 billion in the country, the report added.
