BEIJING—China's homegrown ride-hailing champion, Didi Chuxing Technology Co., has reached a deal to acquire Uber Technologies Inc.'s China operations, people familiar with the deal said, marking an end to their bruising competition for passengers.

A deal could be announced as early as Monday, the people said.

As part of a share-swap deal, Uber will become the largest shareholder in Didi Chuxing after combining its UberChina unit with the Chinese ride-hailing company, according to one of the people.

The deal comes as China officially legalizes ride-hailing services, with nationwide guidelines released last week.

Uber and Didi have duked it out for China's potentially lucrative ride-sharing market by spending huge sums to attract drivers and passengers to their competing services. But both the companies' investors and Chinese regulators have exerted increasing pressure on them to halt the expensive subsidy battle. China's new ride-hailing regulations, which will go into effect in November, forbid running ride-hailing services below cost.

Didi raised $7.3 billion in its latest fundraising round in June, which included a $1 billion investment from Apple Inc. and valuing the Chinese ride-hailing startup at $28 billion. Other backers of Didi also include Chinese e-commerce giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd.

UberChina is backed by Chinese search giant Baidu Inc., which will also become a shareholder in Didi after the share-swap deal is completed, according to one of the people.

Yang Jie contributed to this article.

Write to Alyssa Abkowitz at alyssa.abkowitz@wsj.com, Rick Carew at rick.carew@wsj.com and Eva Dou at eva.dou@wsj.com

 

(END) Dow Jones Newswires

August 01, 2016 01:05 ET (05:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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