Chinese Regulators Reviewing Uber-Didi Merger 2 September 2016

Chinese regulators reviewing Uber-Didi merger 2 September 2016

Chinese anti-monopoly regulators are reviewing Foreign technology brands have struggled in the proposed merger of ride-hailing service Uber China's populous but intensely competitive market. Technology Ltd.'s Chinese operations with its In June, Wal-Mart Stores Inc. sold its Chinese biggest local competitor. online operation to JD.com Inc., the country's No. 2 e-commerce service. The Ministry of Commerce will look at whether the proposed tie-up with Didi Chuxing protects "fair Didi's owners include Chinese Internet giants competition" and consumer rights, a ministry Tencent Holdings Ltd. and Alibaba Group. spokesman, Shen Danyang, said Friday. Uber operates in more than 60 Chinese cities and Uber, headquartered in San Francisco, and Didi plans to increase to more than 100 by the end of announced Aug. 1 they would combine their China 2016. Didi Chuxing, previously Didi Kuaidi, operations, ending a bruising battle in which both operates in 400 Chinese cities. It said the company sides had spent heavily to attract riders. completed 1.4 billion rides in 2015.

Such anti-monopoly reviews are common for © 2016 The Associated Press. All rights reserved. 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 $35 billion. That would make Uber's share worth $7 billion.

Kalanick told the Canadian technology platform BetaKit in February that the company was losing $1 billion a year in China.

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APA citation: Chinese regulators reviewing Uber-Didi merger (2016, September 2) retrieved 25 September 2021 from https://phys.org/news/2016-09-chinese-uber-didi-merger.html

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