Tencent-backed Meituan buys China bike-sharing leader Mobike: reports

A woman wheels a Mobike rental bicycle in Beijing
AFP

Shanghai (AFP) – Chinese online services giant Meituan Dianping will acquire leading shared-bike company Mobike for more than $3 billion, multiple reports said on Wednesday, escalating a turf battle between some of the world’s biggest internet companies.

The deal values Mobike’s equity at about $2.7 billion, and Meituan will also assume roughly $700 million in debt, Bloomberg News said, citing unnamed sources with knowledge of the deal.

Neither company had publicly confirmed the deal as of late Wednesday.

The acquisition would be the latest salvo in a fight for market share largely pitting e-commerce heavyweight Alibaba against social-media, messaging and mobile game giant Tencent.

Alibaba and Tencent — two of the world’s most valuable companies — are jockeying fiercely to build competing all-in-one online-services ecosystems that cater to China’s hundreds of millions of digitally-savvy consumers.

The reported Mobike acquisition by Meituan — which is backed by Tencent — comes just two days after Alibaba announced it was acquiring full ownership of Ele.me, China’s leading food delivery firm and Meituan’s main rival.

Alibaba said that deal valued Shanghai-based Ele.me at $9.5 billion.

The Tencent-Alibaba tussle revolves around their competing online payment platforms, WeChat Pay and Alipay, and the fight to add a suite of online services — from bike rentals to food delivery and e-commerce — that can be paid for via those digital wallets.

In shared bikes, Alibaba already backs Mobike’s main rival Ofo.

Meituan, which began as a group-purchase website offering services similar to Groupon, has expanded to offer a wide range of services, recently adding a ride-hailing app.

“It’s quite positive for Meituan as now it fully covers local services of all aspects,” Zhou Xin, president of Beijing-based internet consultancy Jkinvest Bigdata, told Bloomberg. 

“Meituan is becoming a significant force in itself. Yes, it still belongs to the Tencent camp. But within camps, Meituan is also trying to build its own ecosystem.”

Mobike, Ofo and others have grown rapidly by tapping into the “sharing economy” ethic behind Airbnb and ride-hailing apps such as Uber.

Their bikes are unlocked using a smartphone app, cost as little as one yuan (15 cents) an hour in China and can be left anywhere for the next user. 

Meituan is eyeing a possible IPO in Hong Kong, perhaps as early as this year and with a potential valuation of $60 billion, Bloomberg has previously reported.

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