Uber will sell its China business to Didi Chuxing, the dominant ride-hailing service in the country, according to people familiar with the matter closely, in a deal that values the combined entity at about $35 billion.
The move will put and end to the possibilities of any protracted battle bwtween the two. Didi will invest $1 billion in Uber Global, while Uber will become the largest shareholder in the combined company with 20 per cent stake.
Uber found it extremely difficult to sustain in China, as it was fighting a fierce price war with Didi, and reportedly lost about $2 billion till date in China, in that cutthroat competition.
China has been the battleground of pricing wars among many such companies. One such example, is Didi itself. Didi merged with its largest rival at the time, Kuaidi two years ago.
Didi got the world's attention, after it received $1 billion in investment from Apple. It secured more than $7 billion soon after, taking the company's total valuation to $25 billion, compared to Uber’s $62.5 billion.
The two however, are still competitors outside China. To take on Uber, Didi has partnered with Lyft, Uber’s rival in the US, and has invested in Ola, Uber’s biggest competition in India, as well as in Grab, Uber's competition in Indonesia.