The famous and international ride-hailing service Uber Technologies Inc. will sell their operations and China business to the rival company Didi Chuxing. This competent plays the dominant role in ride-hailing services in the country. According to the sources, people familiar with the company is matters, and this came to ending with the costly battle between the two companies for the customers and drivers.
The total value of the combined business will be $35 billion, reports from the sources and the particulars about the source are confidential since the details aren’t public. The investors in the Uber China, which is an entity owned by San Francisco-based Uber, Baidu Inc. and others. Now these firms will receive 20% of the stake in Didi, which is retreating after the years of losses in China and continues to operate with their application in the country for now.
Apart from this Uber is also selling their China subsidiary, which is the complex deal involves Didi making a $1 Billion investment in Uber Inc. Both Uber and Didi has declined to a have a word on this.
Travis Kalanick, Chief Executive Officer of Uber, wrote in the blog post that “As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart.” “I have no doubt that Uber China and Didi Chuxing will be stronger together.”
Investors of Uber had been insisting the company sell off their China assets. Both the companies Uber and Didi have been spending knowingly for competing in China. Although Uber was profitable in developed markets in the first half of 2015 and Uber has lost more than $2 billion in China.
While Uber will walk away with their operations in China, they are taking the significant stake in the largest player there. After shedding massive losses in China, this move could help Uber for clearing the path for an eventual initial public offering.