Global cab hailing taxi service Uber Technologies on Monday announced it will be merging its China business with rival Didi Chuxing. According to reports, the value of the deal is pegged at $35 billion.
China's investors of Uber, which is based out of San Francisco, U.S., will receive a 20 percent stake in the new combined company, sources were quoted as saying by Bloomberg. The Chinese market dominant Didi Chuxing will make a $1 billion investment in Uber, whose valuation is estimated to be $68 billion.
"As an entrepreneur, I have learned that being successful is about listening to your head as well as following your heart. Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long run," the agency cited Travis Kalnick's, CEO of Uber, blogpost as saying.
Didi Chuxing Technology Co. is valued at $28 billion in its latest fund raising round, the Wall Street Journal reported. Sources said post the deal Uber will become the largest shareholder in Didi Chuxing.