After a bruising two-year battle, ride-hailing firm Uber is selling its China operations to bigger local rival Didi Chuxing.
The merged entity is worth around US$35 billion, based on Didi’s most recent valuation of US$28 billion and Uber China’s US$7 billion worth, Reuters reports, citing a source familiar with the matter.
In a posting on Uber’s website, chief executive Travis Kalanick said San Francisco-based Uber Technologies would have a one-fifth stake in Didi, making it the Chinese firm’s biggest shareholder.
Kalanick will join Didi’s board, and Didi Chuxing chief Cheng Wei will be on the Uber board.
Didi confirmed the agreement on its official microblog, but gave no valuation.
Uber will continue to operate independently, the Didi posting said.
“Cooperating with Uber will give the entire mobile travel industry a healthier order and a period of a higher level of development,” it said.
China has been a challenging market for Uber, which has spent billions of dollars in a price war with Didi.
Both firms spent heavily to attract riders with discounts and both also raised billions in recent fundraisings.
Uber is profitable in the United States, Canada and about 100 other cities.
In an internal message to staff viewed by Reuters, Kalanick wrote: “Sustainably serving China’s cities, and the riders and drivers who live in them, is only possible with profitability. This merger paves the way for our team and Didi’s to partner on an enormous mission, and it frees up substantial resources for bold initiatives focused on the future of cities – from self-driving technology to the future of food and logistics.”
He said Uber was operating in more than 60 cities in China and “doing more than 150 million trips a month”.
Didi, however, claims 87 percent of the Chinese market for private vehicle ride-hailing.
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