China’s largest ride hailing app Didi Chuxing confirmed in a statement on Monday that they will acquire Uber China.
According to the strategic agreement sealed between Didi Chuxing and Uber, Didi Chuxing will acquire all assets of Uber China, including its brand, business operations and data.
Uber, on the other hand, will receive 5.89% of the combined company with preferred equity interest, which is equal to a 17.7% economic interest in Didi Chuxing, according to the statement.
Chinese shareholders of Uber China, among them Baidu, will receive a combined 2.3% economic interest in Didi Chuxing.
In addition, Didi Chuxing will obtain a minority equity interest in Uber. Furthermore, Cheng Wei, founder and chairman of Didi Chuxing, will join the board of Uber. Travis Kalanick, founder of Uber, will join the board of Didi Chuxing.
The acquisition makes Didi Chuxing unquestionably the largest and most competitive ride-hailing company in China, with common investment from Baidu, Alibaba, and Tencent.
“Over 15 million drivers and 300 million registered users have joined Didi’s open, sharing-based ecosystems that connects people, cars, and lifestyles,” said Jean Liu, President of Didi Chuxing in the statement. “With the addition of the strong talent and experience of the Uber China team, Didi Chuxing will be even better-positioned to serve the Chinese people. ”
Didi Chuxing’s investor Matrix Partners China said that competition is not necessarily the essence of business, and that jointly creating values is much better than simply burning resources.
Last Thursday, China became the world’s first country publishing bylaws to legalize ridesharing. A report from Roland Berger predicts a ridesharing market of RMB 500 billion (USD 75.31 billion) in China by 2020.
(Top photo from Baidu Images)