Uber to sell China business to rival Didi Chuxing

After a bruising two-year battle, ride-hailing firm Uber is selling its China operations to bigger local rival Didi Chuxing in a deal that will give Uber a one-fifth stake in Didi. The merged entity is worth around $35 billion – combining Didi’s most recent $28 billion valuation and Uber China’s $7 billion worth – said a source familiar with the matter who did not want to be named before the deal was made public. Uber will continue to

operate independently, the Didi posting said. “Cooperating with Uber will give the entire mobile travel industry a healthier order and a period of a higher level of development,” it said.

Didi confirmed the agreement on its official microblog, but gave no valuation. In a posting on Uber’s website, CEO Travis Kalanick said San Francisco-based Uber Technologies would have a one-fifth stake in Didi, making it the Chinese firm’s biggest shareholder. Kalanick will join Didi’s board, with Didi Chuxing chief Cheng Wei joining the Uber board.

Uber’s China business will retain its separate branding while US-based Uber Technologies will hold a stake of about 17.5% in the combined company.

Under the deal, Didi will also invest $1 billion in Uber, which operates globally outside China, the source said, adding to a series of deals and joint ventures Didi has struck in recent years.