Uber to merge with Chinese rival

Uber will merge its Chinese business with its main domestic competitor, Didi.

Xinhua reported Didi as announcing this week that it has agreed to acquire Uber’s Chinese business in a deal that could value the merged entity at US$35 billion.

As part of the deal, Uber’s global business will take a 5.89% stake in Didi, and Uber’s founder Travis Kalanick will sit on the Didi’s board of directors. In return, Didi’s founder Cheng Wei will take a seat on Uber’s board.

According to Xinhua, the merger follows months of intense competition between the two companies, which has seen them enter a price war to gain market share. This has, in part, contributed to Uber’s struggles in China, where it has so far failed to turn a profit in any major city, despite the fact that it provides more trips in China than any other country.

Didi was boosted in June 2016 when it secured US$7.3bn in equity and debt financing, including CNY1bn from Apple, which valued the start-up at around US$28bn.

sourced:traveldailymedia.com