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| Uber and Rival Didi Chuxing to Combine in China | Uber and Rival Didi Chuxing to Combine in China |
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| SAN FRANCISCO — The great ride-sharing war in China has finally ended. | SAN FRANCISCO — The great ride-sharing war in China has finally ended. |
| Didi Chuxing, the largest ride-hailing service in China, plans to buy Uber China, the Chinese arm of the American ride-sharing giant, in a deal that values the new company at about $35 billion, according to two people with knowledge of the deal. A third person said Uber’s investors had been pushing it to make such a deal. | |
| The merger is a great détente between the two companies, which for more than a year have been ruthlessly battling for market share in mainland China, spending tens of millions of dollars every month to attract riders and drivers. | The merger is a great détente between the two companies, which for more than a year have been ruthlessly battling for market share in mainland China, spending tens of millions of dollars every month to attract riders and drivers. |
| “Three years ago I traveled to China with a small group of people to see if we might be able to launch Uber there,” Travis Kalanick, Uber’s chief executive, said in a blog post shared with The New York Times that will be posted when the company officially announces the deal. “Most of the people we asked for advice thought we were naïve, crazy — or both.” | “Three years ago I traveled to China with a small group of people to see if we might be able to launch Uber there,” Travis Kalanick, Uber’s chief executive, said in a blog post shared with The New York Times that will be posted when the company officially announces the deal. “Most of the people we asked for advice thought we were naïve, crazy — or both.” |
| “However, as an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” he wrote. “Uber and Didi Chuxing are investing billions of dollars in China and both have yet to turn a profit there.” | “However, as an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” he wrote. “Uber and Didi Chuxing are investing billions of dollars in China and both have yet to turn a profit there.” |
| Under the terms of the deal, which was to be announced as soon as Tuesday, the new company’s estimated worth is a combination of Didi Chuxing’s $28 billion valuation, according to these people, who requested anonymity because the information had not yet been made public, along with Uber China’s $7 billion valuation. Investors in Uber China will receive a 20 percent stake in the new company. | Under the terms of the deal, which was to be announced as soon as Tuesday, the new company’s estimated worth is a combination of Didi Chuxing’s $28 billion valuation, according to these people, who requested anonymity because the information had not yet been made public, along with Uber China’s $7 billion valuation. Investors in Uber China will receive a 20 percent stake in the new company. |
| Didi Chuxing will also make a $1 billion investment in Uber Global, which was last valued at $62.5 billion, according to these people. Bloomberg first reported news of the deal. | Didi Chuxing will also make a $1 billion investment in Uber Global, which was last valued at $62.5 billion, according to these people. Bloomberg first reported news of the deal. |
| The merger is the latest sign of the challenges American tech companies face in trying to enter the Chinese market. Over the past two years Uber upended expectations in China and created a growing business in a country despite heavy regulation and internet filters that often keep foreign companies at bay. The early 2015 rollout of People’s Uber, a service that got ordinary Chinese drivers behind the wheel and taking passengers, helped Uber grab a chunk of market share from Didi. | |
| But the early success gave way to a protracted spending battle, as both Uber and Didi spent billions offering discounted rides and subsidizing driver fares. For Uber, the spending proved a bigger obstacle than regulations; last week, Chinese officials said ride-hailing apps were legal, and laid out a framework to license drivers. | |
| China has seen many protracted spending wars by companies trying to attract customers—one of which included Didi itself. Two years ago, when Didi merged with what was its largest rival at the time, Kuaidi, investor concern about overspending for market share helped lead to the deal. |