Didi to merge with Uber China in $47b deal
CHINA'S dominant ride-hailing firm Didi Chuxing will merge with Uber's business in China in a US$35 billion (S$47 billion) deal that will end bruising competition between the two firms, according to a source familiar with the matter.
The deal between the pair - which have been spending heavily to gain market share and battling fiercely for passengers - is nearly complete and could be announced as early as yesterday, said the source, who declined to be identified because the deal is not yet public.
The new entity combines Didi's most recent valuation of US$28 billion and Uber China's US$7 billion valuation for the US$35 billion market capitalisation.
Uber China investors will have a 20 per cent stake in the new company, the source said.
Uber declined to comment.
In addition, Didi will invest US$1 billion in San Francisco-based Uber, which operates globally outside China, the source said.
Didi last year invested US$100 million in Lyft, Uber's main rival in the United States.
It has also formed an alliance with Lyft, India's ride service Ola and South-east Asia's ride-hailing start-up Grab in an effort to compete with Uber's global dominance.
China has been a challenging market for Uber.
The company was burning through more than US$1 billion a year in a price war with Didi.
Uber is profitable in US, Canada and about 100 other cities.
The deal comes after China last week issued guidelines that establish a long-awaited framework for the ride-hailing industry and remove uncertainty for firms such as Didi and Uber.