China’s internet giants Alibaba and Tencent have confirmed the merger of their taxi-hailing applications.
Alibaba’s Kuaidi Dache and Tencent’s Didi Dache said over the weekend they have completed the union, although both app companies will still operate independently with their respective chief executives in place, the Financial Times reported.
The combined company will be worth about US$6 billion, the newspaper said, citing local media reports. Kuaidi Dache last month raised US$600 million from Japanese telecoms group SoftBank and existing shareholders, and Didi Dache raised US$700 million in December.
Kuaidi Dache (“Speedy taxi”) had 54.4 percent share of the Chinese market as of the third quarter, while Didi Dache (“Honk Honk Taxi”) had 44.9 percent, according to research group Analysys International.
Although China has antitrust regulations, these have been rarely applied to big domestic companies, whether state-owned or private, the report said.
“The combined company expects to conduct the businesses of Kuaidi and Didi independently under separate brands,” the companies said in a statement. “The co-CEOs are especially grateful to the company’s shareholders for their support of the company’s independent operations.”
The companies use incompatible payment systems: Kuaidi Dache has Alibaba’s Alipay, while Didi Dache uses Tencent’s mobile payment system.
In December, China’s third internet company Baidu agreed to buy into US-based taxi-hailing app Uber, whose rollout has proven controversial in many countries including China.
The three have their own regional power bases: Tencent in the south, Alibaba in the Yangtze Delta and Baidu in Beijing, FT said.
– Contact us at [email protected]