Uber sell the business to a competitor in the largest market

Photo: STR/AFP

In the coming days, Uber announced the merger of its Chinese division with its main rival in China, Didi Chuxing. The value of the merged company will be approximately $35 billion

On the sale of Chinese business Uber main competitor of the American company in the PRC market service, taxi Didi Chuxing — reported by several media (Bloomberg, The Wall Street Journal, The New York Times, Financial Times, citing sources familiar with the situation. Under the deal, the owners of the Chinese “daughter” of Uber, Uber China, among which, in particular, is the Chinese company Baidu Inc., will receive a 20-percent stake in Didi Chuxing.

Later on 1 August the transaction has confirmed Uber. In a statement the head of Uber Travis Kalanick said about the “merger” Uber China Chuxing and Didi. the businessman notes that both Didi and invested in Uber taxi service in China “billions of dollars and both companies have yet to profit from these investments.” Kalanick said, “Uber and Didi China Chuxing, they will undoubtedly be stronger together.”

In addition to the transmission Didi Chuxing Chinese business Uber, the terms of the deal suggest that the Chinese company invests in Uber’s $1 billion Cost of the combined company will be $35 billion, according to informed sources Bloomberg.

Didi Chuxing is China’s largest taxi service. The company was founded in 2015 by merging competing companies Didi Dache and Kuaidi Dache (they invested the two largest Internet companies of China, Tencent and Alibaba, respectively). In the same year, at the presentation to investors, the representatives of the Didi, said that by 2020 the volume of China’s market of taxi services will be $50 billion annually.

In 2016, Didi Chuxing has invested $1 billion Apple. Just in the middle of June, the company from China has attracted investments of $7.3 billion, the Whole company was valued at $28 billion Now, according to the company, users, Didi Chuxing are about 300 million people who make 14 million trips a day. Among the owners of the company — 33-year-old Chen Wei, part of a global list of the richest businessmen by Forbes with a fortune of $1 billion.

The deal between Uber and Didi Chuxing has become known a few days after the Chinese government formally legalized services to on-call drivers.

According to Bloomberg, citing unnamed sources, Uber has suffered heavy losses — more than $2 billion — when trying to enter the Chinese market. The company’s strategy in China was built at great discounts for passengers and bonuses for drivers. In mid-June, Kalanick said that China has become the largest market for the company, surpassing the us market.

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