Uber, investors in UberChina unit will own 20% of Didi; Chinese ride-hailing firm will invest $1 billion in Uber
Global ride-hailing giant Uber Technologies Inc. has given up its costly battle for China’s riders, swapping its local operations there for a minority stake in the country’s homegrown champion, Didi Chuxing Technology Co.
Didi, which was valued at $28 billion in its latest fundraising round, said Monday that Uber and investors in its UberChina unit will take a 20% stake in the company. Combined with Uber’s China business that was valued at around $8 billion, Didi will have a valuation of around $36 billion.
After the merger, Uber will become the largest shareholder in Didi. The Chinese ride-hailing company will also invest $1 billion in Uber as part of the deal, a person familiar with the matter said.
The deal marks an end to Uber’s efforts to establish an independent foothold in China, which began in 2013 and was considered a rare case of a U.S. tech firm making inroads in the local market. Besides Apple Inc., which has struggled of late with slowing sales in China, few other companies have gone toe-to-toe with Chinese rivals for local consumers.
This merger “frees up a substantial resources for bold initiatives focused on the future of cities—from self-driving technology to the future of food and logistics.” Uber Chief Executive Travis Kalanick said in a prepared statement. Operating in China “is only possible with profitability.”