BRASILIA • China's ride-hailing app Didi Chuxing has agreed to acquire control of Brazil's 99, the companies said in a statement on Wednesday, potentially creating a formidable rival to Uber in Latin America's largest economy.
The companies did not disclose the stake acquired nor the value, but two people familiar with the deal told Reuters that the transaction would value 99 at over US$1 billion (S$1.33 billion) and that Didi would hold a "significant majority".
The Chinese firm bought out investors such as Riverwood Capital, Monashees, Qualcomm Ventures, Tiger Global Management and SoftBank Group Corp, said one of the people. Brazilian newspaper Valor Economico earlier reported the valuation of the deal and the investors involved.
The acquisition intensifies Didi's global rivalry with Uber Technologies, especially in Latin America.
Reuters reported last month that Didi planned to enter Mexico this year. It has previously partnered overseas ride-hailing companies to offer reciprocal services in other countries, but Didi is now looking to launch its own services overseas.
Didi's potential Mexico entry represents the four-year-old firm's first move to deploy drivers under its own brand outside of China.
Two people familiar with the deal told Reuters that the transaction would value Brazilian firm 99 at more than this figure and that Didi Chuxing would hold a "significant majority"
Didi founder and chief executive Cheng Wei said in Wednesday's statement that "globalisation is a top strategic priority for Didi".
The Chinese firm first invested US$100 million in 99 in January last year, getting a stake and management rights in the Brazilian app.
One source with knowledge of the matter said the funds selling their stakes in 99 started looking for a buyer several months ago, in mid-2017.
Didi has made no secret of its desire to expand beyond China, particularly in the light of the growing number of Chinese customers who travel overseas.
The firm sealed its dominance in the Chinese market after buying out Uber's China business in 2016, ending an expensive subsidy war that cost the American firm roughly US$2 billion.
Last month, Didi raised US$4 billion from investors, in part to fund global expansion. This followed its US$5.5 billion fundraising in April.