China’s largest ride-hailing platform, Didi Chuxing, has denied rumors surrounding its acquisition by on-demand service provider Meituan Dianping, on Thursday, via its account on microblogging platform Weibo.
Ruicaijing, a public account on WeChat, circulated rumors that Meituan was in discussions with Didi for an acquisition of the ride-hailing platform, which could result in the largest-ever merge in China’s internet history. However, the original link has disappeared, with only a screenshot posted on Zhihu, a question-and-answer platform.
“Someone really dares to make things up while others really dare to believe“, Didi’s Weibo post said, above a picture with a prawn dragging an egg. The messages and image form a pun on the word “groundless bullshit” in Chinese.
Didi confirmed with KrASIA on Friday that this Weibo post refers to these market speculations.
In April, some investors told tech media outlet EqualOcean that Meituan Dianping should consider acquiring Didi to take advantage of the company’s network, especially when its valuation has come down to earth. Didi was selling shares at around USD 30 to USD 40 in a deal, down from a peak price of about USD 55, according to EqualOcean.
The rumors come as Meituan has been exploring ride-hailing, which is Didi’s core business. The company allows people in 54 cities to hail a private ride via its app in 2019, and its losses in this segment have been narrowing since the company shifted from operating its own ride-hailing fleet to integrating several smaller ride-hailing services, namely Shouqi Limousine & Chauffeur, Caocao, and UCar into its app, according to its annual report.
Meituan admitted in its first quarter earnings release that its ride-hailing business was negatively affected by the COVID-19 pandemic, but did not offer additional details.
Didi’s ride-hailing business was affected too, but has returned to pre-pandemic level in early June, according to a KrASIA report.
In addition to ride-hailing, Meituan has bike-sharing business, which it acquired from Mobike and rebranded as Meituan Bike. Didi’s bike-sharing company, Qingju, closed its first round of financing, attracting more than USD 1 billion from Legend Capital and another overseas investment firm, to fund its future growth.
Didi is pushing into Meituan’s turf too. In March, the company launched an errand service in Chengdu, Sichuan and Hangzhou, Zhejiang, promising to deliver everything from groceries, drinks, medicine, and even flowers within a city. Meituan has offered similar services since March 2017.