Uber China to merge with lo­cal ri­val Didi

The Myanmar Times - - International Business -

RIDE-SHAR­ING gi­ant Uber is to merge its China oper­a­tions with lo­cal ri­val Didi Chux­ing, end­ing a fe­ro­cious bat­tle for mar­ket share in the world's sec­ond-largest econ­omy.

The deal will give Uber a 20 per­cent share in the com­bined firm, Bloomberg News re­ported, adding it will be val­ued at US$35 bil­lion.

Both com­pa­nies have spent bil­lions of dol­lars on sub­si­dies for driv­ers and pas­sen­gers, as well as trad­ing vit­ri­olic ac­cu­sa­tions, as they fought for dom­i­nance in the po­ten­tially lu­cra­tive mar­ket.

As re­ported, the struc­ture of the agree­ment leaves Didi Chux­ing in un­ques­tioned con­trol.

By "shed­ding its mas­sive losses" in China, Uber will help clear its way to a fu­ture flota­tion, Bloomberg said.

The re­ports come days after Chi­nese au­thor­i­ties an­nounced new rules gov­ern­ing rideshar­ing, mak­ing clear for the first time that they may op­er­ate legally in the coun­try.

The new rules also said rideshar­ing plat­forms will be for­bid­den to op­er­ate be­low cost, pos­si­bly re­strict­ing their scope to of­fer sub­si­dies.

Didi, which has 90pc of the China ride-hail­ing mar­ket, said last month that it had re­cently raised $7.3 bil­lion – $1 bil­lion of which came from Ap­ple – in one of the world's largest pri­vate eq­uity fi­nanc­ing rounds.

As part of the lat­est deal, Didi Chux­ing will in­vest $1 bil­lion in Uber, valu­ing the US firm at $68 bil­lion, Bloomberg re­ported. –

Photo: EPA

Car-hail­ing app ser­vice Uber's of­fice in Che­ung Sha Wan, Kowloon, Hong Kong. Ac­cord­ing to me­dia re­ports yes­ter­day, Didi Chux­ing is buy­ing its lo­cal ri­val Uber China.The merger deal, which will end bruis­ing com­pe­ti­tion be­tween the two busi­nesses, is re­ported to be val­ued at US$35 bil­lion.

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