The new entity’s US$35 billion (S$47 billion) market capitalisation is made up of Didi’s most recent valuation of US$28 billion and Uber China’s US$7 billion valuation.
Advertisement
Uber is handing over its China operations to Didi in an acquisition deal that would end the battle between the two ride-hailing companies to dominate the market. Bloomberg, citing experts familiar with the matter, says Uber’s huge losses in China have prevented the company from moving forward with a potential IPO.
Admitting defeat, United States ride-hailing firm Uber is selling its China operations to its bigger local rival there Didi Chuxing.
The Chinese government passed a new rule last week that legalized ride-hailing services, paving the way for further expansion of these businesses.
He added that the deal would “set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level”.
During this time, Uber has lost $US2 billion ($AUD2.6 billion) in China raising qualms with its investors. Uber leaves with around a one-fifth stake in Didi, but will give up control of its China operations.
It seems as if Apple is now financially tied to Uber as it recently acquired a large chunk of Didi Chuxing.
Among those closely watching Didi’s acquisition is Grab, the dominant Southeast Asia ride-hailing start-up that competes with Uber in countries including Singapore and Vietnam.
Kalanik wrote today, “I have no doubt that Uber China and Didi Chuxing will be stronger together”.
Uber CEO Travis Kalanick said on a blog post that the two companies had invested billions of dollars in China and that both had yet to turn a profit there.
Didi also boasts investments from the high-profile venture capital firm GGV Capital, which is known for investing in USA and Chinese businesses like Square.
Didi itself was created a year ago from the merger of two companies backed separately by e-commerce giant Alibaba Group Holding Ltd and social network firm Tencent Holdings Ltd.
Advertisement
Uber China will keep its branding in the country, but Didi Chuxing will integrate the two companies’ technology and management.
