Didi Chuxing confirms merger with Uber China

A model for an auto show in Taiyuan, Shanxi province, uses the Didi Chuxing car-hailing service to commute from her college to the auto show. [Photo/China Daily]

Didi Chuxing confirmed on Monday that it will merge with Uber China's business, putting an end to the two companies' cash-burning fight over the dominance of China's ride-hailing market.

Didi said in a statement that it has agreed to acquire Uber's operation in China in a deal that gives Uber a 5.89 percent stake in Didi. Didi will also gain a small stake in Uber's global business, valued at $68 billion.

A Chinese mobile phone user uses the taxi-hailing and car-service app Didi Chuxing on his smartphone in Jinan city, East China's Shandong province, Feb 22, 2015.[Photo/IC]

"The two sides will operate cross shareholding and become minority shareholders for each other," the statement from Didi said.

According to the statement, Uber global's 5.89 percent of Didi's shares will equal 17.7 percent of the economic rights. The other Chinese shareholders in Uber China will achieve 2.4 percent of the economic rights.

Didi Chuxing has become the only enterprise in the country that received investments from China's three major internet companies -- Baidu Inc, Tencent Holdings Ltd and Alibaba Group Holding Ltd, known as BAT.

Travis Kalanick, CEO of Uber, speaks at the Annual Meeting of the New Champions 2016 during the World Economic Forum 2016 Summer Davos in Tianjin, June 26, 2016.[Photo/IC]

"Cheng Wei, founder and president of Didi Chuxing and Travis Kalanick, chief executive officer of Uber, will simultaneously join their counterpart company's board of directors," the statement said.

Western media reported that investors behind the two companies have been pushing them to end the fight in China as both of them have spent a lot to gain loyalty from users.

A Chinese mobile phone user uses the taxi-hailing and car-service app Didi Chuxing on his smartphone in Jinan city, East China's Shandong province, Feb 22, 2015.[Photo/IC]

"Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there," Travis Kalanick, chief executive officer of Uber, wrote in a blog post obtained by China Daily today.

"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," he said in post to announce the company's intention to merge Uber China with Didi.

Last week, a long-awaited regulation giving legal status to online car-hailing services in China was approved and released by the nation's State Council.

Aimed at regulating the taxi market and car-hailing services in China, the regulation requires car-hailing platforms, such as Didi Chuxing and Uber Technologies, to review the qualifications of drivers and their cars to guarantee safe rides.

Last February, Didi Dache and Kuaidi Dache, the precursors of the Didi Chuxing, jointly announced their strategic merger, becoming one of the largest vendors in the market.