Chinese regulators reviewing Uber-Didi merger
Chinese anti-monopoly regulators are reviewing the proposed merger of ride-hailing service Uber Technology Ltd.'s Chinese operations with its biggest local competitor.
Beijing: Chinese anti-monopoly regulators are reviewing the proposed merger of ride-hailing service Uber Technology Ltd.'s Chinese operations with its biggest local competitor.
The Ministry of Commerce will look at whether the proposed tie-up with Didi Chuxing protects "fair competition" and consumer rights, a ministry spokesman, Shen Danyang, said today.
Uber, headquartered in San Francisco, and Didi announced August 1 they would combine their China operations, ending a bruising battle in which both sides had spent heavily to attract riders.
Such anti-monopoly reviews are common for mergers or acquisitions in China involving foreign companies. Most are approved unchanged but business groups complain Beijing is using regulation to limit foreign access to promising industries.
Regulators have met twice with Didi Chuxing managers to review its operations, said Shen at a regular news briefing. Didi Chuxing said it would acquire Uber China and operate it as a separate brand.
In exchange, Uber said it will receive a 20 percent stake in Didi Chuxing that will make the American company its biggest shareholder. Uber founder Travis Kalanick will join the Chinese company's board while Didi Chuxing founder Cheng Wei joins the Uber board.
No financial details were released, but the Chinese business magazine Caixin, citing unidentified sources, said the deal valued the combined company at USD 35 billion. That would make Uber's share worth USD 7 billion.
Kalanick told the Canadian technology platform BetaKit in February that the company was losing USD 1 billion a year in China.
Foreign technology brands have struggled in China's populous but intensely competitive market. In June, Wal-Mart Stores Inc. Sold its Chinese online operation to JD.Com Inc., the country's No. 2 e-commerce service.
Didi's owners include Chinese Internet giants Tencent Holdings Ltd. And Alibaba Group.
Uber operates in more than 60 Chinese cities and plans to increase to more than 100 by the end of 2016. Didi Chuxing, previously Didi Kuaidi, operates in 400 Chinese cities. It said the company completed 1.4 billion rides in 2015.