Meituan Dianping (美團點評), the Chinese food review and delivery giant, is acquiring Mobike Technology Co Ltd (摩拜科技) in a deal that values the three-year-old bike-sharing start-up at about US$3.4 billion, people familiar with the matter said.
Meituan has agreed to buy full control of Mobike, whose chief executive officer would keep operating the business as an independent entity, Meituan said yesterday, without divulging details.
The deal values Mobike’s equity at about US$2.7 billion, and Meituan is to assume about US$700 million in debt, said one of the people, asking not to be identified because the matter is private.
Sixty-five percent of the purchase would be in cash, mostly to Mobike management, and 35 percent would be in stock, so Mobike investors would become Meituan shareholders, the person said.
The acquisition thrusts Tencent Holdings Ltd (騰訊) to the forefront of two key markets in direct opposition to Alibaba Group Holding Ltd (阿里巴巴) — on-demand delivery and bike sharing — and could escalate an ongoing battle between some of the world’s biggest Internet companies.
In bike sharing alone, Alibaba backs Mobike’s main rival Ofo Inc (共享單車), while car-hailing giant Didi Chuxing (滴滴出行), backed by Softbank Group Corp, has begun investing heavily in the same space.
Meituan itself, formed by a merger with Dianping, has grown into a super app, offering everything from group-buying deals and ride hailing to travel packages and payments. With a few taps to navigate its smartphone apps, Chinese customers can order hot meals, groceries, massages, haircuts and manicures at home or in the office.
It is unclear whether all of its management are to remain on board: Mobike cofounder Hu Weiwei (胡瑋煒) yesterday included a link to the Nine Inch Nails song The Beginning of the End in a post on her WeChat (微信) account.
“There’s no ‘ouster’ — from my perspective it’s a new beginning,” she wrote.
Meituan has begun discussions to go public in Hong Kong as soon as this year and is targeting a valuation of at least US$60 billion, people familiar with the matter said.
The company is also considering listing its shares in China if policies allow.
Its primary competitor is Ele.me (餓了麼), a similar provider of local services owned by Alibaba.
Mark Natkin, managing director of Beijing-based Marbridge Consulting, said the deal would help Meituan achieve its goal of producing a super app that caters to a swathe of user needs.
That in turn would help boost usage of online payments, a field dominated by Alibaba-backed Ant Financial Services Group (螞蟻金服) and Tencent’s WeChat.
While the price paid for Mobike might seem high considering the lack of a longer track record, Natkin said China’s Internet market is dominated by players like Tencent and Alibaba who are willing to pay a premium for potential break-out firms.
“It’s not a cheap deal, but it’s a key time in the development of the bike-sharing business to pick a winner and get behind it,” he said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
INCREASING PRESSURE: Pegatron chief financial officer Louise Wu said the merger would allow them to be more flexible when meeting customer needs Pegatron Corp (和碩), an Apple Inc assembly partner, yesterday said that it would fully absorb metal casing subsidiary Casetek Holdings Ltd (鎧勝) in a NT$14.5 billion (US$490.93 million) deal to improve the companies’ competitiveness in the phone assembly supply chain. When Pegatron and Casetek suspended trading earlier in the day, speculation swirled that a possible purchase by China’s Luxshare Precision Industry Co (立訊精密) might be in the cards, but the announcement of the merger dispelled any conjecture. The board of directories of each company agreed that Pegasus Ace Limited, a wholly owned subsidiary of Pegatron, would purchase Casetek in a reverse triangular