Uber selling its Chinese business to rival Didi Chuxing
Ride-sharing company Uber is giving up on competing head-to-head in China with rival Didi Chuxing, another ride-hailing service. There’s news that Didi Chuxing is buying Uber’s China operations in a deal worth about $35 billion.
In exchange, Uber will now own a slice of Didi Chuxing and Uber’s CEO will get a spot on the Chinese company’s board.
Celia Hatton, the Asia Pacific regional editor for our editorial partners at the BBC, spoke to us about the deal. Here are some of Hatton’s key takeaways from the merger:
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Didi Chuxing owned between about 80 to 90 percent of the Chinese market, by most accounts, making it stiff competition for Uber.
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The Chinese-based company is itself the product of a merger between two smaller companies: Didi Dache and Kuaidi Dache. They were quick to enter the market, operating in China before Uber came in.
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Didi Chuxing has been able to attract powerful allies, with Apple deciding to invest $1 billion in the service.
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Uber investors will get about a 6 percent stake in the newly merged company, equivalent to an almost 18 percent “economic stake.”
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Uber is slated to make millions, possibly billions, from the deal.
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Many say the deal is similar to Yahoo’s 40 percent acquisition of Alibaba, a financial decision that turned out well for Yahoo.
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