HONG KONG: China’s Didi is in talks with state-backed Sinomach Automobile to buy a third of its electric-vehicle unit, two sources said, signalling the ride-hailer’s regulatory troubles are in the rear view mirror as it focuses on growth.
The deal, if completed, would accelerate Didi Global Inc’s strategic expansion in the world’s largest EV market and help cushion the impact of the pandemic on its core ride-hailing business.
Scrutiny from Beijing for suspected violation of data security has forced Didi to pursue a delisting from New York and rein in its business but there are signs of a thaw. The Wall Street Journal reported on Monday that regulators are set to conclude their investigations into the company.
Didi aims to acquire shares in small-sized automaker Sinomach Zhijun Automobile from minority shareholders and inject new capital into the firm, one of the sources told Reuters. A stake of that proportion would cost Didi more than 1 billion yuan ($150 million), said the other source.
The talks for a stake in Sinomach Zhijun are in an advanced stage, the sources said. One of them said the two sides have given themselves time till the month-end to nail the deal, which will see Didi become the second-biggest shareholder of the EV maker after Sinomach Automobile.
The parent and its related entities own a combined 67% of Sinomac Zhijun, showed the corporate registry.