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China's Meituan Dianping acquires bike-sharing firm Mobike
April 4, 2018 6:00 am|Comments (0)

BEIJING (Reuters) – Meituan Dianping, China’s largest provider of on-demand online services, is buying bike-sharing firm Mobike for $ 2.7 billion excluding debt, in a deal that will intensify the rivalry of their common backer Tencent Holdings with Alibaba Group.

A Mobike bike-sharing bicycle is pictured in Singapore August 29, 2017. REUTERS/Edgar Su

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 $ 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.

A Mobike is pictured after Chinese bike sharing company MOBIKE launched its service in Mexico City, Mexico February 28, 2018. REUTERS/Henry Romero

The two bicycle-sharing companies have waged a costly war of subsidies in a bid to win the Chinese market as well as overseas markets.

Earlier this week, Alibaba said it would assume full control of Chinese food delivery platform Ele.me, a rival to Meituan.

Mobike, which counts over 30 million rides a day, will maintain its brand following the deal and keep its current management team, Meituan said.

Reporting by Cate Cadell in BEIJING, Julie Zhu and Kane Wu in HONG KONG; Editing by Muralikumar Anantharaman

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