On August 1, Didi Chuxing announced that they reached a strategic deal with Uber Technologies Inc., where Didi has bought out Uber’s China operations including brand, business, data and all assets. After the mega deal, Didi and Uber will each hold shares in the other’s company, each becoming a minority shareholder. Industry insiders acknowledge that the mega deal will mean the consolidation of 90% market shares for the ride-hailing business in China under one name.
When asked to comment on market monopoly concerns, Didi responded by saying that neither Didi nor Uber China have profits to report and revenue for Uber China for the past tax year has not reached the reportable threshold. Thus Didi is of the position that they do not have to report the deal as per anti-trust regulations and reportable threshold rules for mergers, while also stressing that Didi is open to communicating further with regulators as required.
During a press conference held by the Ministry of Commerce on August 17, spokesperson Shen Danyang answered a question about the Didi-Uber China merger by saying that the Ministry has the right to investigate cases where a merger would severely limit or possibly eliminate market competition, even when the reportable threshold has not be reached.
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Keywords: officials investigate Didi Uber China merger monopolizes car-hailing business in China
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If Uber didn't sell to Didi, I'm sure they would have been banned eventually forcing everyone to use Didi anyway. Very smart of Uber to walk away from a hostile business enviornment. Had they stayed they would have ended up like Facebook(banned to force people to use QQ/wechat), Google(banned to force people to use baidu) or Youtube(banned to force people to use youku, tudou etc). This move shows how smart the people at Uber are and that they have studied recent Chinese business history.
Aug 19, 2016 15:12 Report Abuse