Chinese Internet Rivals Form New Company
October 08 2015 - 2:20AM
Dow Jones News
Meituan.com and Dianping Holdings Ltd., two of China's largest
Internet startups, said Thursday that they have created a new
company in a deal that turns two rivals into a dominant player in
restaurant bookings, movie ticketing and other online-to-offline
services.
Meituan and Dianping said in a statement that the new company
will be headed jointly by the chief executives of Meituan and
Dianping. But Meituan and Dianping will continue to operate their
platforms and services separately, the companies said.
The Wall Street Journal reported Wednesday that Meituan, a
Chinese service similar to Groupon.com, and restaurant-review app
Dianping were nearing a combination that could create a business
valued at more than $15 billion, citing people familiar with the
situation.
Meituan's investors include online-shopping giant Alibaba Group
Holding Ltd., while Dianping is backed by Alibaba's chief Internet
rival, Tencent Holdings Ltd., an online games and social-networking
company. Meituan and Dianping said that their decision to team up
and create a new company was supported by Alibaba and Tencent, as
well as venture-capital firm Sequoia Capital China, which has
invested in both Meituan and Dianping.
The alliance between Meituan and Dianping comes as Chinese apps
that connect users with brick-and-mortar services have been locked
in a fierce price war to attract consumers by offering deep
discounts. Some venture capitalists have questioned the strategy
that relies heavily on subsidized discounts, saying such a business
model wouldn't be sustainable in the long run.
Write to Juro Osawa at juro.osawa@wsj.com
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(END) Dow Jones Newswires
October 08, 2015 02:05 ET (06:05 GMT)
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