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Meituan Dianping acquires Mobike for US$2.7b

Beijing

MEITUAN Dianping, China's largest provider of on-demand online services, is buying bike-sharing firm Mobike for US$2.7 billion, in a deal that will intensify the rivalry of their common backer Tencent Holdings with Alibaba Group.

Meituan announced the deal on Wednesday but did not disclose the value of the deal. Two sources told Reuters the equity value of the deal was US$2.7 billion.

The deal consolidates the resources of the two firms, which are backed by Chinese gaming and social media giant Tencent, as Mobike faces off against Alibaba-backed Ofo, which also counts ride-hailing firm Didi Chuxing as a major investor.

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The two bicycle-sharing companies have raised hundreds of millions of dollars from investors but have waged a costly war of subsidies in a bid to win the Chinese and overseas markets.

"(We) need to be more soberly aware that the competition Mobike is facing is becoming increasingly fierce," said Mobike executives in a letter to employees shared with the media on Wednesday.

In June, Mobike raised US$600 million in a round led by Tencent and expanded into Singapore, the US and the UK, among other markets.

As part of the acquisition, Meituan and Mobike will share technology, operations, marketing and customer service resources, Meituan said. Mobike, which counts over 30 million rides a day, will maintain its brand following the deal and keep its current management team, Meituan said. REUTERS