Chinese food delivery startups Meituan and Dianping, have announced their plans to become one to create an online-to-offline company in the country. The deal amount is still undisclosed by both the firms but as per some media reports it is said to be around $15 billion.
Dianping is backed by Tencent, while Meituan has received funding from Alibaba. “This strategic cooperation is supported by shareholders of both companies including Alibaba, Tencent and Sequoia Capital. China Renaissance acted as the exclusive financial advisor to both Dianping and Meituan in this transaction,” said in a joint statement by both the firms. In February 2015, Alibaba and Tencent had also merged their cab businesses Didi Dache and Kuaidi Dache.
As part of the deal, both Dianping and Meituan will retain their respective brands and management structure, and will independently work under the new parent company. The cooperation is expected to enable both companies to complement each other in their respective strengths, and to push for innovation across China’s O2O industry.
“Meituan is very happy to enter into this strategic cooperation with Dianping. It enables us to focus on better serving our consumers and merchants, and allows us to concentrate on developing new businesses and driving product innovation,” said Wang Xing, CEO of Meituan.
Chinese firms appear to be following a trend of shaking hands with the competition for a greater benefit. In February 2015, Didi Dache and Kuaidi Dache, two of China’s taxi-hailing apps merged to create one of the world’s largest smartphone-based transport services Didi Kuaidi. And, in April, 58.com, Chinese classified site bought its rival Ganji.com. This is the third such deal this year.