Chinese Taxi-Hailing Apps In Merger Talks: Reports

(RTTNews) - The two largest taxi-hailing apps in China, backed by Chinese tech giants Alibaba Group Holding Ltd. (BABA) and Tencent Holdings Ltd. (TCEHY), are in "advanced talks" to merge, according to reports.

KuaiDi Dache, whose lead investors are Alibaba and SoftBank, is reported to be in "advanced" merger talks with Tencent-backed Didi Dache, the Wall Street Journal reported citing people with knowledge of the matter. However, the merger has not been finalized as it requires support from their primary investors.

The deal is expected to create a company valued at around $6 billion, with both Alibaba and Tencent holding equal stake. The deal might be announced the week after next, according to reports.

However, according to WSJ, the main hurdle for the deal to go through would be regarding the payment system that the merged taxi-hailing business would use, with both Alibaba and Tencent offering separate channels.

Last month, KuaiDi Dache had raised $600 million from investors including SoftBank, Alibaba and Tiger Global.

Meanwhile, in December, Chinese search giant Baidu Inc. announced plans to invest in Uber and become a strategic partner in China.