Ride-sharing app Uber has struck an agreement to merge its Chinese business with rival Didi Chuxing in a 35 billion US dollar (£26bn) deal.
As part of the tie-up, investors in loss-making Uber China will pick a 20% stake in Didi Chuxing, while the deal marks an end to a bitter, two-year rivalry in the country.
Didi Chuxing chief executive Cheng Wei said: “Didi Chuxing and Uber have learned a great deal from each other over the past two years in China’s burgeoning new economy.
“This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”
Didi Chuxing, which is owned by Chinese internet titans Tencent and Alibaba, controls almost 90% of the market in China. The company said a total of 1.43 billion rides were completed on its platform in 2015.
Uber China will keep its branding in the country, but Didi Chuxing will integrate the two companies’ technology and management.
Uber chief exeucutive and co-founder Travis Kalanick said: “Uber China – in just two years – has exceeded even my wildest dreams. We’ve grown super-fast and are now doing more than 150 million trips a month.
“Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there.
Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.”
In another sign of increased consolidation in the global ride hailing market, last week Daimler said its MyTaxi firm will join forces with the smartphone app Hailo to create a new company with 70 million passengers.
The move was seen as an attempt to stall the continued rise of Uber by creating Europe’s biggest e-hailing taxi company.