The Chinese car-hailing giant Didi Chuxing is buying Uber China in a $35 billion deal, and for investors that means a big sigh of relief.
The two companies had been rivals in China, with Uber consistently lagging behind Didi in the region.
Private-equity investors in particular had reportedly been pushing for a truce as both companies poured in billions of dollars with no profit to show for it.
That is why the deal makes sense, according to Fan Bao, the founder of China Renaissance and a Didi investor.
“We are very happy the nuclear warfare seems to have stopped and the management can focus on delivering core value to customers and shareholders,” he told Business Insider on Monday.
In addition to being a Didi investor, his firm was the sole adviser on the 2015 merger of Didi Dache and Kuaidi Dache into what later became Didi Chuxing.
Bao did not advise on the Uber China deal, but in an interview back in June he told Business Insider:
“Among all the foreign internet companies, Uber has put up the best fight in China. They’re really hanging tough there. No foreign internet company has ever succeeded in China. They are doing as good a job as they can, so hats off to them. But I think it’s kind of tough to compete with Didi in China, because at the end of the day, it’s a domestic business, there’s a huge domestic market. And the Didi guys are good, I mean, they’re really good, so I think it’s really a tough battle.”
On the prospect of doing a deal at the time, he added: “Logic kind of tells you that some sort of partnership makes sense.”