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July 17, 2018

Didi to spin off car services unit in up to $1.5 billion deal: sources

Didi to spin off car services unit in up to $1.5 billion deal: sources
FILE PHOTO: Logo of Didi Chuxing is seen at its headquarters building in Beijing

By Julie Zhu and Kane Wu

HONG KONG (Reuters) - Chinese ride-hailing giant Didi Chuxing Technology Co Ltd is looking to spin off its car services unit in a deal worth up to $1.5 billion ahead of its expected initial public offering, people with direct knowledge of the matter told Reuters.

Didi is hoping to raise between $1 billion and $1.5 billion for the unit and has tapped investors including SoftBank Group (T:9984), an existing investor in the firm, the sources said.

The unit is mainly involved in car rental and maintenance services and also provides drivers with optimized gas station deals, the people said, adding Didi is currently valuing the unit at between $2 billion and $3 billion.

Didi declined to comment, while SoftBank did not immediately respond to a request for comment. The people declined to be named as the information was confidential.

Didi cemented its spot as China's biggest ride-hailing company when it bought Uber's operations in the country in 2016.

It has since expanded into a number of markets worldwide, including Southeast Asia, Brazil, Mexico and Australia, by either taking stakes in local ride-hailing firms or rolling out its own services.

The company has also launched a food delivery service to compete with Meituan-Dianping, China's dominant startup in that area, which is planning its own IPO of more than $4 billion in Hong Kong in the coming months.

Didi is also expected to go public at some point in what is expected to be one of the biggest IPOs of recent years given the company's current $56 billion valuation. The company has never confirmed its IPO plan.

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