The partnership follows an expensive battle between the two companies.
Advertisement
The new, combined company is expected to be worth billion, and Uber China will still own roughly 20 percent of the operations.
Uber operates in about 60 cities in China and serves 40 million rides a week.
Bloomberg reported that Uber has lost more than $2 billion trying to compete in China, and investors have been pushing for the company to offload its Chinese business. Uber declined to comment, and Didi didn’t immediately respond to a request for comment.
“However, as an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart”, he wrote.
As part of the latest deal, Didi Chuxing will invest $1bn in Uber, valuing the USA firm at $68bn, Bloomberg reported. In July previous year, Uber had announced an investment of Dollars 1 billion (nearly Rs 6,652 crore) in India to expand its services here.
The share-swap deal comes not long after China released a framework to legalize ride-hailing services in the country.
Investors of Uber had been insisting the company sell off their China assets. Uber is profitable in the U.S., Canada and about 100 other cities. However, in a recent blog post, Uber founder Travis Kalanick said his gut instinct tells him that the two companies “will be stronger together”. “Sustainability serving China’s cities, and the riders and drivers who live in them, is only possible with profitability”. To ensure stability and continuity of service, the agreement allows Uber China to maintain independent branding and business operations while Didi will combine the two teams’ managerial and technological experience and expertise.
Didi Chuxing was also part of a global strategic alliance with Ola, Grab, and Lyft.
Advertisement
Uber China had “exceeded even my wildest dreams” as “most USA technology companies struggle to crack the code there”, he said. It has also received a $1 billion investment from Apple Inc.in May, in addition to investments from China’s internet giant Tencent Holdings and Alibaba Group Holding.
