SAN FRANCISCO (BLOOMBERG) - Didi Chuxing is buying Brazilian ride-hailing company 99 Taxis, placing Didi in direct competition with Uber Technologies in one of the US company's busiest international markets.
Didi, which led a US$100 million investment in 99 Taxis a year ago, announced the acquisition on Wednesday (Jan 3).
"Globalisation is a top strategic priority for DiDi," Cheng Wei, the Chinese ride-hailing company's chief executive, said in a statement.
Didi did not disclose the terms of the cash deal. Technology news site The Information had previously reported about talks between the two companies.
The deal is a sign that the exploding ride-hailing industry may become dominated by global companies, rather than local monopolies. It also shows that Didi wants to lead consolidation and is prepared to spar with Uber even though they will soon share SoftBank Group as a major shareholder.
After Uber sold its Chinese business to Didi in exchange for about a 17.5 per cent stake in the Chinese company in August 2016, it looked like the era of fierce competition and massive losses might end. Together Didi and Uber had spent heavily on driver subsidies in China, burning cash to fight for market share. Their deal - and another between Uber and Yandex in Russia in 2017 - signaled that consolidation might allow for single regional leaders.
Uber's recent deal with SoftBank, already a big backer of Didi, had raised questions about whether Uber might strike truces with other SoftBank-backed companies like Ola in India or Grab in South-east Asia.
Now, Didi - which faces competition at home from Meituan - is eyeing one of the international markets where Uber has faced the least competition. Sao Paulo and Rio de Janeiro are Uber's top two busiest cities in the world as ranked by the number of trips that take place there.
"The investment marks a significant next step of DiDi's global strategy," the company said in a statement. "DiDi has entered partnerships with seven major international players, in a network that serves over 1,000 cities and reaches over 60 per cent of world population."