China regulator says Didi, Uber deal will need ministry’s approval

A merger between Chinese ride-hailing firm Didi Chuxing and the China unit of U.S. rival Uber could face its first hiccup after China’s commerce ministry (Mofcom) said on Tuesday it had not received a necessary application to allow the deal to go ahead.

Didi’s acquisition of Uber’s China operations, announced on Monday, will create a roughly $35 billion ride-hailing giant and could raise monopoly concerns as Didi claims an 87 percent market share in China. Uber China is the second largest player.

Mofcom, one of China’s anti-trust regulators, said at a news briefing that the two firms need to seek approval for the deal to go ahead. It had been unclear previously whether such a filing would be required as both firms are loss-making in China.

“Mofcom has not currently received a merger filing related to the deal between Didi and Uber,” ministry spokesman Shen Danyang said. “All transactors must apply to the ministry in advance. Those that haven’t applied won’t be able to carry out a merger” if they fall under applicable anti-trust and merger rules, he said.

Didi Chuxing did not immediately respond to a request for comment. Uber did not respond to requests for comment.

Didi and Uber have been in a fierce battle in China, spending billions of dollars to subsidize rides and win users.

Other players, however, could step up competition.

Jia Yueting, head of LeEco, the parent of smaller ride-hailing rival Yidao, said in a social media post the firm would offer steep rebates to attract passengers to help avoid there being a monopoly in the market.

“Yidao will soon kick off an even more aggressive cashback campaign,” according to a translation of Jia’s posting provided by a LeEco spokeswoman.

Regulations released last week that take effect on Nov. 1 legitimize ride-hailing, but prohibit services from offering rides below cost.

Also read:

Uber said to plan boosting resources for Southeast Asia, India

Didi Chuxing’s dominance of Uber in China offers roadmap for ride-hailing apps

Reuters

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.