China's Didi acquires Uber's Chinese share for $35 billion
Chinese ride-sharing giant Didi will take over Uber's China business, in a deal worth USD 35 billion as the US car-hailing firm gave in after fierce competition from its rival in the world's second-largest economy.
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Uber will take a 5.89 percent stake in Didi. Didi did not disclose the stake it will take in Uber. Uber China's on-demand mobility (ODM) service will continue to operate independently. The deal follows China's legalisation of ODM services.
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Uber's founder Travis Kalanick and Didi founder Cheng Wei will sit on each other's company boards.
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Post the merger of its Chinese business; Uber is expected to focus more aggressively on the Indian market, its third biggest market after the US and China, at present.
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Interestingly in India, Uber is locked in an intense battle with market leader Ola which counts Didi as an investor.
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Didi had picked up a stake in Bengaluru-based Ola last year as a part of the USD 500 million funding round.
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Last December, Didi Chuxing, along with Ola, US-based Lyft and GrabTaxi had also formed a global pact to share customers and technology across countries to compete with Uber.
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Uber has been pumping in substantial funds to fuel its growth in India. In July last year, Uber had announced an investment of USD 1 billion in India to expand its services here. It has also set up a response and support centre in Hyderabad with an investment of USD 50 million.
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There were also reports suggesting that Uber may buy Ola, though the Indian company rubbished those saying it has "no intentions of selling to Uber".
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Uber is one of very few foreign tech firms that has been able to compete with domestic rivals head-on in China.
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While Didi holds a majority share in China's ODM services, Uber has managed to establish a foothold and has made inroads into lower-tier cities this year to threaten Didi's dominance further.
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In June, Didi announced it had secured USD 7.3 billion in equity and debt financing, including USD 1 billion from Apple which valued the start-up at around USD 28 billion.
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Uber has secured over USD 6 billion in its latest funding.
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Liu Zhen, Uber China head of strategy, said in June that most of the money raised would fund Uber's operations in China.
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While Uber has generated over USD 1 billion in profit from its top 30 cities worldwide, the company has not yet turned a profit in any Chinese city, even though it provides more trips in China than any other country, Kalanick said.
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