Clermont Meridian Trading Reveals Didi Chuxing set to Purchase Uber's China Division in $35 Billion Deal

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Clermont Meridian Trading Reveals Didi Chuxing set to Purchase Uber's China Division in $35 Billion Deal

Didi Chuxing, a Chinese ride-hailing service, has agreed to buy Uber's China division. The deal values the combined company at $35 billion, according to financial specialists at financial services company Clermont Meridian Trading.

Uber Global will have a 5.89 percent ownership in the combined company, with a "preferred equity interest" of 17.7 percent. Didi Chuxing will gain a 2.3 percent stake from Baidu and Uber's other Chinese shareholders, bringing the combined company's stake to 20%.

Didi's current $28 billion valuation and Uber China's $7 billion valuation add up to $35 billion. Uber did not respond to a request for comment on the valuation. According to an official release, Didi's founder and chairman, Cheng Wei, will join the Uber board of directors. Uber's CEO, Travis Kalanick, will join Didi's directors.

"In China, Uber and Didi, the country's leading ride-hailing service, has been involved in a fierce rivalry. The American start-up has lost $2 billion in China over the last two years as it tries to gain a competitive advantage," explained Andrew Wakefield, Head of Corporate Derivatives at Clermont Meridian Trading.  

Uber China will maintain its independent identity and business activities as part of the deal to "guarantee stability and continuity of service for passengers and drivers." Didi will also combine the two firms' "managerial and technological competence."

Didi may be able to grow beyond China and into new areas as a result of the agreement, and Didi Chuxing's worldwide approach will also be expanded. In a statement released on Monday, Didi Chuxing president Jean Liu stated, "We look forward to collaborating with our partners at home and overseas to generate more value for drivers, passengers, and communities."

According to Chinese news publications and social media sites, both Uber and Didi have spent billions of dollars in China, but none has proven successful.

Last week, China issued new regulations that allowed ride-hailing applications, a move that Didi and Uber applauded.

Didi Chuxing, which means "honk honk, commute" in Chinese, was formerly known as Didi Kuaidi and was formed in early 2015 by merging China's two largest ride-hailing applications at the time Didi Dache and Kuaidi Dache. It just completed a $7.3 billion fundraising round, in which Apple was a participant.