By Nicole Golliher
Bringing an end to Uber’s push into the China market, Uber China is merging with its Chinese competitor, Didi Chuxing. The sale ends the intense competition between the two companies and raises Didi Chuxing’s value to about $35 billion. Uber shareholders are expected to hold a 20 pecent stake in Didi Chuxing, making Uber the ride-sharing company’s biggest shareholder.
This merger is not a financial failure for Uber, but representative of US tech companies’ consistent difficulties in China. Despite early gains, Google and eBay were also unable to continue their early success in China and were surpassed by domestic competitors.
In a blog statement announcing the sale, Uber’s CEO and cofounder, Travis Kalanick, said that Uber China has “exceeded even my wildest dreams,” praising its quick growth as “no small feat given that most US technology companies struggle to crack the code there.”
Kalanick also expressed his optimism that Uber China and Didi Chuxing will be “stronger together,” and hopes the new company will be able to build a profitable business in China, something both companies have yet to achieve.
The deal, announced on Monday, comes just a few days after the Chinese Communist Party announced a new set of guidelines for the ride-sharing industry. Previously, Uber China and Didi Chuxing operated in a legal grey zone. The new law is expected to go into effect on November 1.