Didi Chuxing, a China-based ride-sharing company, has announced a strategic agreement with Uber. In this agreement, Didi will acquire all assets of Uber China — including its business operations and data —for operation within mainland China.
This transaction signals a new stage in the development of China's ride-share industry, according to the company.
In exchange for the Uber China assets, Uber will receive 5.89% of the combined company with preferred equity interest, which is equal to a 17.7% economic interest in Didi. In addition, Baidu and other Chinese shareholders will receive a 2.3% economic interest in Didi, according to the company.
Under the agreement, Didi will also obtain a minority equity interest in Uber. Cheng Wei, founder and chairman of Didi, will join the board of Uber. Travis Kalanick, founder of Uber, will join the board of Didi.
Additional terms were not disclosed. With this transaction, Didi becomes the only company with common investments from Tencent, Alibaba, and Baidu, according to the company.
Here are some more details under the agreement:
• Uber China will maintain independent branding and business operations to ensure stability and continuity of service for passengers and drivers.
• Didi will integrate the managerial and technological experience and expertise of the two teams.
• Didi will work with regulators, peers, and stakeholder groups to continue educating the market in support of the growth of China's mobile internet industry and the nation's economic development program.
• Didi will continue to work with global partners in connecting local resources to create the best possible cross-border ridesharing experience for their users.
"Didi Chuxing and Uber have learned a great deal from each other over the past two years in China's burgeoning new economy,” said Cheng Wei, founder and CEO of Didi Chuxing. “As a technology leader deeply rooted in China, Didi Chuxing is constantly pushing the frontier of innovation to redefine the future of human mobility. This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level. Didi Chuxing commits all our energy to work with regulators, users, and partners to meet the transportation, environmental, and employment challenges of our cities."