Chinese ride hailing company Didi Chuxing Technology, which also backs Ola in India, is buying rival Uber Technologies's China business, according to media reports. The deal could have repercussions in the ongoing taxi wars in India too.
The deal is worth $35 billion with Didi said to investing about $1 billion in Uber, Bloomberg reported citing sources. The news follows Chinese's governments decision to legalisee ride-hailing taxi services in China.
Uber is expected to combine Uber China with Didi, becoming the largest shareholder in the company, the WSJreported. Uber China is backed by Uber, and Baidu Inc. among others.
Speculation has been rife about an impending agreement between Uber and Didi in China as Uber was seeking to cuts its losses in the fiercely competitive Chinese market.
Battle Continues On Indian Soil
With Uber reaching a truce in China, India may well become a battleground against Didi-backed Ola to dominate market share.
The deal could further heighten competition between the two ride hailing services, or lead to a similar deal in India although the latter seems more unlikely, analysts have said. Didi is a strategic investor in Ola, which raised about $500 million from Didi, SoftBank among others late last year.
India remains a key market for Uber which his trying to pump its market share against Ola. Last month, Uber raised $3.5 billion from a Saudi fund, with plans to invest a huge portion of that in its India operations.
The fight between Ola and Uber even spilled to blog wars last month with executives from the two accusing each other on who might be doing more nation-building in India. The two services have routinely cut fares to out-compete each other.