Uber is selling its China-based operation to its main local rival, Didi Chuxing. The news, as of yet unconfirmed officially, is based on credible reports and documents from inside of Uber.
Bloomberg is citing people familiar with the matter, in saying that Uber’s investors have been pressuring the company to sell its Chinese assets and focus on other opportunities around the world. The assets will go the company’s main rival, Didi Chuxing, which will also invest $1 billion in Uber’s global operations. This comes after a long price-war between the two companies that left both contenders bleeding money and kept them from reaching profitability in China. According to the same report, Uber has lost $2 billion in China over the past two years, with this loss also being a major issue for the company’s planned IPO.
Didi Chuxing, backed by Alibaba, Tencent, and more recently Apple, will essentially become a part owner of Uber globally, while buying out its brand locally in China. Travis Kalanick, Uber’s CEO will join Didi’s board, with the same move being mirrored with Didi’s CEO and Uber’s board.
Of course, the deal also complicates matters on a global scale where Didi Chuxing still is a partner with Lyft and other ride-sharing services whose stated aim was to take down Uber.
The deal will see Didi Chuxing being valued at around $35 billion according to the same people familiar with the matter, while Uber was recently valued at $68 billion. The move is also expected to finally allow Uber to start trading publicly, an initiative that was delayed due to considerable losses incurred in developing markets, especially China.
Source: Bloomberg | Image via the Drum