Uber to sell China business to rival Didi after losing billions

Uber to sell China business to rival Didi after losing billions

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Chuxing, the dominant in China, said it will acquire Technologies’ operations in the country, ending a battle that cost the two  billions as they competed for customers and drivers.

Didi will buy Uber’s brand, business and data in the country, the Chinese company said in a statement. Uber Technologies and Uber China’s other shareholders, including search giant Baidu, will receive a 20 per cent economic stake in the combined company. Didi founder and Uber Chief Executive Officer will join each other’s boards.

The truce brings to an end a bruising battle between the two companies for leadership in China’s fast-growing ride-hailing market. Uber has been spending at least $1 billion a year to gain ground in China, while Didi offered its own subsidies to drivers and riders to build its business.

“Didi Chuxing and Uber have learned a great deal from each other over the past two years,” said Cheng, who is also CEO, in the statement. “This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”

Didi’s valuation after the deal will be $35 billion, said people familiar with the matter, asking not to be named because the details aren’t public. Last year, China’s ride-hailing leaders Didi and Kuaidi joined forces, creating a homegrown juggernaut to fight off Uber. The merged company Didi Chuxing brought together backers and Tencent Holdings, the country’s most valuable internet businesses. Apple joined in this year with a $1 billion investment in Didi, in a round that valued the company at about $28 billion.

The Chinese government passed a new rule last week that legalised ride-hailing services, paving the way for further expansion of these businesses.

Uber’s investors had been clamouring for the company to sell off its China assets and focus on more promising opportunities. Uber has lost more than $2 billion in the country, people familiar with the matter said. Meanwhile, Uber was profitable in developed markets in the first half of 2015, the people said.

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