Meituan Dianping, China's largest provider of on-demand online services, is buying bike-sharing firm Mobike for $2.7 billion excluding debt, in a deal that will intensify the rivalry of their common backer Tencent Holdings with Alibaba Group.
Meituan announced the deal on Wednesday but did not disclose the value of the deal. Two sources told Reuters the equity value of the deal was $2.7 billion.
The deal consolidates the resources of the two firms, which are backed by Chinese gaming and social media giant Tencent, as Mobike faces off against Alibaba-backed Ofo, which also counts ride-hailing firm Didi Chuxing as a major investor.
The two bicycle-sharing companies have waged a costly war of subsidies in a bid to win the Chinese market as well as overseas markets.
Earlier this week, Alibaba said it would assume full control of Chinese food delivery platform Ele.me, a rival to Meituan.
Mobike, which counts over 30 million rides a day, will maintain its brand following the deal and keep its current management team, Meituan said.