Beijing’s municipal government has proposed an investment in Didi Global that would give state-run firms control of the world’s largest ride-hailing company, according to people familiar with the matter.
Under the initial offer, hobby group – part of the influential Beijing Tourism Group — and other firms based in the capital will acquire a stake in Didi, the people said, asking not to be identified while discussing personal information. He said the scenarios being considered include a consortium taking the so-called “golden share” with veto power and a board seat.
Didi said on Saturday that she is working with regulators on a cybersecurity review and that reports about the Beijing-led investment are false. US-traded shares of the company rose 7.5% on Friday morning in New York. The stock is down 36 per cent this year.
It is not clear how big the stake the city is eyeing and whether senior government officials will approve its proposal. Didi is currently controlled by the management team of co-founder Cheng Wei and chairman Jean Liu. softbank and Uber are Didi’s largest minority shareholders.
The Beijing Municipal Party Committee’s press office did not respond to a request for comment, while a call to Shouqi remained unanswered. And this beijing tourism The group did not respond to a request for comment.
Local governments have traditionally had a major role in restructuring companies in their region, and the envisaged solution coincides with that of the Chinese president. Xi JinpingPriorities to redistribute assets and reduce the impact of the Internet sector. People said that the proposal for the city could include a large share of didi or a golden part with a minor share and a board seat. The latter model would be similar to an earlier investment by the government in ByteDance’s Chinese unit, which gave the state unit veto-rights over key decisions.
The takeover proposal comes with a string of penalties Xi’s administration is considering for the country’s ride-hailing leader, which began in New York in June over objections from China’s cyberspace administration. It has since been mired in scrutiny of data security and the way it treats its millions of drivers. One of the options Beijing is considering involves reasserting state control over a company that has traditionally operated in a legal gray zone.
Under the initial offer, hobby group – part of the influential Beijing Tourism Group — and other firms based in the capital will acquire a stake in Didi, the people said, asking not to be identified while discussing personal information. He said the scenarios being considered include a consortium taking the so-called “golden share” with veto power and a board seat.
Didi said on Saturday that she is working with regulators on a cybersecurity review and that reports about the Beijing-led investment are false. US-traded shares of the company rose 7.5% on Friday morning in New York. The stock is down 36 per cent this year.
It is not clear how big the stake the city is eyeing and whether senior government officials will approve its proposal. Didi is currently controlled by the management team of co-founder Cheng Wei and chairman Jean Liu. softbank and Uber are Didi’s largest minority shareholders.
The Beijing Municipal Party Committee’s press office did not respond to a request for comment, while a call to Shouqi remained unanswered. And this beijing tourism The group did not respond to a request for comment.
Local governments have traditionally had a major role in restructuring companies in their region, and the envisaged solution coincides with that of the Chinese president. Xi JinpingPriorities to redistribute assets and reduce the impact of the Internet sector. People said that the proposal for the city could include a large share of didi or a golden part with a minor share and a board seat. The latter model would be similar to an earlier investment by the government in ByteDance’s Chinese unit, which gave the state unit veto-rights over key decisions.
The takeover proposal comes with a string of penalties Xi’s administration is considering for the country’s ride-hailing leader, which began in New York in June over objections from China’s cyberspace administration. It has since been mired in scrutiny of data security and the way it treats its millions of drivers. One of the options Beijing is considering involves reasserting state control over a company that has traditionally operated in a legal gray zone.
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