China’s ride-hailing application Didi Chuxing has agreed to acquire control of Brazil’s 99, the companies said in a statement on Wednesday, potentially creating a formidable rival to Uber in Latin America’s largest economy.
The companies did not disclose the stake acquired nor the value, but two people familiar with the deal told Reuters that the transaction would value 99 at over $1 billion and that Didi would hold a ‘significant majority’ of the Brazilian firm.
The Chinese company bought out investors such as Riverwood Capital, Monashees Inc, Qualcomm Ventures, Tiger Global Management LLC and SoftBank Group Corp, said one of the people.
Brazilian newspaper Valor Econômico earlier reported the valuation of the deal and the investors involved.
The acquisition intensifies Didi’s global rivalry with Uber Technologies Inc, especially in Latin America. Reuters reported in December that Didi planned to enter Mexico this year.
It has previously partnered with overseas ride-hailing companies to offer reciprocal services in other countries, but Didi is now looking to launch its own services overseas.
Didi’s Mexico entry represents the 4-year-old firm’s first move to deploy drivers under its own brand outside of China.
Cheng Wei, founder and chief executive of Didi, said in Wednesday’s statement that “globalization is a top strategic priority for Didi.”
Didi first invested $100 million in 99 in January 2017, getting a stake and management rights in the Brazilian app.
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One source with knowledge of the matter said the funds selling their stakes in 99 started looking for a buyer several months ago, in mid-2017.
Riverwood, Monashees, Tiger Global, and SoftBank did not reply to requests for comment.
Didi has made no secret of its desire to expand beyond China, particularly in light of the growing number of Chinese customers who travel overseas.
The firm sealed its dominance in the Chinese market after buying out Uber’s local China business in 2016, ending an expensive subsidy war that cost the U.S. firm roughly $2 billion.
In December, Didi raised $4 billion from investors, in part to fund global expansion, following on from a $5.5 billion fundraising in April.
