China: Didi / Uber ride-hailing merger deal will need Mofcom antitrust approval

A merger between Chinese ride-hailing firm Didi Chuxing and the China unit of US rival Uber could face its first hiccup after China’s commerce ministry said on Tuesday it had not received a necessary application to allow the deal to go ahead.

However, Didi said there was no need to seek regulatory approval, saying the two ride-hailing companies’ lack of profits meant they weren’t required to file with the ministry.

Didi’s acquisition of Uber’s China operations, announced on Monday, will create a roughly $35 billion ride-hailing giant and could raise monopoly concerns as Didi claims an 87 percent market share in China. Uber China is the second largest player.

Mofcom, one of China’s anti-trust regulators, said at a news briefing that the two firms need to seek approval for the deal to go ahead. It had been unclear previously whether such a filing would be required as both firms are loss-making in China.

“Mofcom has not currently received a merger filing related to the deal between Didi and Uber,” ministry spokesman Shen Danyang said. “All transactors must apply to the ministry in advance. Those that haven’t applied won’t be able to carry out a merger” if they fall under applicable anti-trust and merger rules, he said.

In an emailed statement to Reuters on Tuesday, Didi contested Shen’s assertion that the firm is required to apply for approval.

“We are in close communication with authorities,” said Didi.

Full Content: Reuters

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