In a big business deal, the famous taxi-hailing app company Uber, will merge its China business with its rival Didi Chuxing.
In a big business deal, the famous taxi-hailing app company Uber, will merge its China business with its rival Didi Chuxing. The deal will take the combined value of the company to $35 billion, reported Bloomberg. According to the report, investors in Uber China will receive 20 per cent stake in the combined entity. While both Uber and Didi are yet to comment on the report, an official announcement in this regard is expected as early as Monday. In June this year, Didi Chuxing raised $7.3 billion funding from its investors.
In May 2016, Didi Chuxing became famous for attracting a whopping $1 billion from tech giant Apple Inc. Apple Chief Executive Tim Cook had at that time said that the investment would help his company better understand the Chinese market. “We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” he had said. Didi Chuxing dominates the ride-sharing market in China and claims to complete over 11 million rides a day, with more than 87 per cent of the market for private car-hailing in China.
Reports suggest that Uber’s decision to merge its China operations with Didi Chuxing may be an attempt to stem losses the company is suffering in the Chinese market. Some reports suggest that Uber has already lost as much as $2 billion in China, till date.
WATCH: Uber, Didi Chuxing To Merge In China
Uber China is backed by Baidu Inc, which is a Chinese search giant. After the deal, Baidu is likely to become a shareholder in Didi Chuxing.