After losing China, Uber’s stake in Didi raises $8 billion in IPO

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(Bloomberg) — Five years ago, Uber Technologies Inc pulled out of the world’s second-largest economy by selling its China business to rival DiDi Global Inc. In exchange for a stake in the company. Now, the American passenger transportation services company is profiting from its trade.

Didi, China’s largest taxi-delivery company, raised about $4.4 billion in its initial public offering in the United States on Tuesday and sold more shares than it originally planned. Didi’s stock closed 1% higher at $14.14 on Wednesday, giving the company a market value of about $68 billion.

That makes Uber’s current 12% stake worth about $8.1 billion. Didi’s public offering is the second largest US listing by a Chinese company, after that of Alibaba Group Holding Ltd. $25 billion for the first time in 2014, according to data compiled by Bloomberg.

Founded in 2012 by Cheng Wei, Didi emerged as Uber’s biggest competitor in China at a time when the San Francisco-based company was vying to expand globally. In their battle for market share, Uber spent billions of dollars before cutting its losses by selling Uber China to Didi, known as Didi Chuxing at the time. The deal left Uber with a 20% stake in its competition. Uber was selling some of its Didi shares in the run-up to its initial public offering, reducing its holdings from about 14% in the first quarter.

Despite Didi’s dominance in China, momentum in the region is beginning to slow. The company plans to use the IPO money to invest in technology, increase its presence in some international markets and introduce new products, according to US filings.

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