After a long battle, Uber has agreed to cede business in China to rival Didi Chuxing in a deal estimated at $35B.
(CCM) — On Monday, Uber announced plans to merge its operations in China with local competitor Didi Chuxing, ending a three-year battle for marketshare and an expensive price war. Under the agreement, the American company and its local investors (including search engine giant Baidu Inc.) will receive a 20% stake in the combined company — an estimated value of $35 billion. In addition, Didi founder Cheng Wei and Uber Chief Executive Officer Travis Kalanick will join each other’s Board of Directors. "I have no doubt that Uber China and Didi Chuxing will be stronger together. That’s why I’m so excited about our future, both in China — a country which has been incredibly open to innovation in our industry — and the rest of the world," said Kalanick in a statement on the Uber newsroom.
In the three years since Uber's entrance into China, the company has never managed to turn a profit, losing an estimated $2 billion to its competitor. Unconfirmed sources have indicated that this merger comes amid pressure from shareholders to sell off the company at the risk of losing even more business and pushing off an IPO. With the battle in China now over, Uber is at liberty to expand operations to other areas of the world.
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