Uber reverses out of China with $7bn sale to Didi Chuxing

The new company will valued at around $35bn (£19bn) – given Didi’s previous $28bn valuation, that values China at $7bn – and puts an end to a year-long standoff that has led to both Uber China and Didi losing money in an effort to secure a lasting victory. Uber alone has lost more than $2bn in the fight.

 

At times, the battle has got nasty. One year ago Uber accused China’s biggest messaging app, WeChat, of deleting its accounts on the service. WeChat’s owner, Tencent, is a substantial investor in Didi. So too are Alibaba, China’s answer to Amazon, and Apple, which took a $1bn stake in May.

 

Uber China, meanwhile, counts Baidu among its external investors, as well as Uber Global (the company is structured as an independent corporation). Following the buyout, Uber China investors will own 20% of the new Uber-Didi conglomerate. Symbolising the extent to which former enemies are now partners, Didi is also taking a $1bn stake in Uber Global, at a valuation of almost $70bn.

 

The detente has a further outcome. With the removal of the biggest question mark hanging over Uber’s future, the company is now free to focus on the next major step in its corporate plan: an initial public offering, likely to arrive some time in 2017.

 

Uber’s seemingly unceasing expansion across the world has finally had the brakes applied as the ride-sharing company plans a deal to sell its Chinese operation to local rival Didi Chuxing, according to Bloomberg News.

 

 

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