Amid competition from US-based taxi-hailing app Uber, two of China’s leading car-booking apps, Didi Dache and Kuaidi Dache, have announced to end their rivalry and join hands to create one of the world’s largest smartphone-based transport services.
The combined entity is estimated to be worth about US$6 billion. Didi is believed to hold a larger stake of 52%.
The firms said the two companies, which will formally introduce the new business after the Lunar New Year, would operate independently and both CEOs would become co-chief executives.
Didi and Kuaidi, backed by Chinese internet giants Tencent and Alibaba respectively, have been dominating the market with 95% market share.
The two firms have recently received more than US$1 billion investment to expand their services.
Didi raised US$700 million from Tencent and Russian private equity fund DST in December, while Kuaidi raised US$600 million from backers including Softbank and Tiger Global.
Their main rival Baidu also announced an investment in Uber in December, heating up the competition in the world’s largest transport market with more than 150 million monthly users.