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Published on : Tuesday, August 2, 2016
The media reported that Didi has agreed to acquire Uber’s Chinese business in a deal that could value the merged entity at US$35 billion. Uber’s global business will take a 5.89% stake in Didi.
Although the have been fierce competitors, with an 87% share Didi Chuxing dominates the Chinese market.
Uber China launched in 2014 but has failed to make any profit so far.
Despite having Chinese search engine Baidu as an investor, Uber has been struggling to break into the Chinese market . In February, the company admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted fares.
Cheng Wei, founder and chief executive of Didi Chuxing, said that, the two companies had “learned a great deal from each other over the past two years in China’s burgeoning new economy”.
Mr. Cheng will join the the board of Uber as part of the deal. While Uber chief executive Travis Kalanick will join Didi’s board.
Didi Chuxing is backed by Chinese internet giants Tencent and Alibaba, and has also invested in Uber’s rival US taxi-booking service Lyft.