The Strategist

Bloomberg: Beijing's plans to gain control over "Chinese Uber"

09/06/2021 - 11:21

Beijing may buy a "golden share" of the cab service Didi, Bloomberg learned. This would give the state control of the company, which held an IPO in New York in the summer.

The authorities in Beijing intend to buy control of the cab service Didi, obtaining the "golden share" with the right of veto and a seat on the board of directors, writes Bloomberg citing sources.

Previously, the Chinese authorities used a similar model to acquire stakes in subsidiaries ByteDance and Sina Weibo. It is planned that the state transportation company Shouqi Group and other state companies will buy a stake in Didi, the agency said. It's not yet known what stake Beijing expects to get and whether its proposal will be approved by the federal authorities.

According to Bloomberg's sources, among the city’s options, in addition to buying a nominal stake with a "golden share" and a seat on the board of directors, there is also a scenario with the acquisition of a significant stake in Didi.

The service itself, however, claims that this information is untrue. "Currently, Didi is actively cooperating with the government in its cybersecurity review of the company. Reports in foreign media that Beijing authorities are offering companies to invest in the service are incorrect," the company said in a statement on Weibo.

Representatives of Shouqi Group and the Beijing administration did not respond to requests for comment.