After locking horns as competitors on opposite sides of a capital intensive battle, ride hailing companies Uber Technologies and Didi Chuxing Technology agreed on a merger that will create a $36 billion behemoth in China, according to reports.
The merger comes after a blood bath that saw both companies running on a fast burn, spending billions of dollars to corner market share, luring drivers with fat commissions and riders with deep discounts.
In the end, Uber chief executive Travis Kalanick buckled under investor pressure and cut a deal with the deeper pocketed and more focused Didi to cut its losses in China.
The deal makes Uber the homegrown Didi’s largest stakeholder, holding 18% ownership of the merged entity.
Kalanick, who sources say was enticed by Uber’s initial success in China, waved the white flag, and told local employees that operating in the country “is only possible with profitability.”
“I’ve learned that being successful is about listening to your head as much as following your heart,” he said in an email announcing the deal that was circulated to employees.
