Chinese on-demand mobility (ODM) firm Didi announced Monday it will take over Uber's China business? in a deal that could value the merged China operation at 35 billion U.S. dollars.? (Source: Xinhuanet)
BEIJING? Aug. 1 (Xinhua) -- Chinese on-demand mobility (ODM) firm Didi announced Monday it will take over Uber's China business? in a deal that could value the merged China operation at 35 billion U.S. dollars.
Uber will take a 5.89 percent stake in Didi. Didi did not disclose the stake it will take in Uber. Uber China's ODM service will continue to operate independently.
The deal follows China's legalization of ODM services.
Uber's founder Travis Kalanick and Didi founder Cheng Wei will sit on each other's company boards.
The two companies have been locked in a bitter battle for customers in China marked by huge customer discounts since last year.
Uber is one of very few foreign tech firms that has been able to compete with domestic rivals head-on in China. While Didi holds a majority share in China's ODM services? Uber has managed to establish a foothold? and has made inroads into lower-tier cities this year to further threaten Didi's dominance.
The competition has seen the two companies locked in a discount war in an attempt to poach riders away from each other's platforms. In June? Didi announced it had secured 7.3 billion dollars in equity and debt financing? including 1 billion dollars from Apple? which valued the start-up at around 28 billion dollars.
Uber has secured over 6 billion dollars in its latest funding round. Liu Zhen? Uber China head of strategy? said in June that most of the money raised will fund Uber's operations in China.
While Uber has generated over 1 billion dollars in profit from its top 30 cities worldwide? the company has not yet turned a profit in any Chinese city? even though it provides more trips in China than any other country? Kalanick told Xinhua on the sidelines of the World Economic Forum in the northern Chinese city of Tianjin in June.
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