Chapter 157 Didi Acquires Kuaidi
Longda, in Tibetan, Long means wind and Da means mouth. The Longda paper with mantras written on it will convey people's prayers to the gods and Buddhas through the wind.

Xie Jingxing clearly remembered the first stop of the 318 self-driving trip, the top of Zheduo Mountain at an altitude of more than meters, and the sales pitch of the local vendor selling Longda paper.

Before entering Tibet, Didi faced a life-and-death crisis of mutual distrust between management and investors. He convinced himself to bow his head and give in.

So today, the meaning of "Londa" from his mouth is the arduous march of traveling thousands of miles side by side.

It was also a crisis of trust between the management and investors that resulted in Cheng Wei's surrender. It was very reasonable for both of them to risk their lives for the sake of a gentleman.

"Do you still want to talk?" Xie Jingxing said in a light tone with a proud smile.

Liu Chih-Ping looked a little bewildered: "How many votes do you three have combined?"

"75%." Liu Qing said softly.

Zhu Xiaohu was furious and remained silent. Liu Chih-ping rushed to Beijing to express his attitude, trying to get Xie Jingxing to reduce his shareholding ratio and actually prevent his turning to Uber China from causing any major impact on Didi.

This was done to avoid testing human nature, but Xie Jingxing turned around and tested people's hearts.

Cheng Wei and Liu Qing really took his advice and played a gentleman's game without any constraints without any factual basis.

The most ridiculous thing is that these three people together control at least 75% of Didi’s voting rights. In other words, even if all other investors and all other management oppose it, it will be ineffective unless they break up.

Talk? What's the point of talking? This is really courting death. Why can Cheng Wei and Liu Qing unconditionally trust that Xie Jingxing will not betray and stab them at the critical moment?

Zhu Xiaohu racked his brains but couldn't figure it out. Liu Chih-ping had a vague understanding but had no intention of interfering.

The experience passed down by word of mouth in many technical departments of Tencent is that when you see a piece of code with a bug running normally, don't try to fix the bug. Perhaps the bug is the core of the normal operation of the program.

Human hearts are much more complicated than bugs. As long as Xie Jingxing, Cheng Wei, and Liu Qing can maintain a stable iron triangle and lead Didi forward to defeat Uber China, it doesn't matter whether it is based on trust or something else.

"How do we talk to Kuaile?" Zhu Xiaohu asked the question unwillingly.

Xie Jingxing was prepared: "Let's talk to Lu Chuanwei alone first."

"Ali's attitude is very important. They have their strategic needs," Zhu Xiaohu emphasized.

Xie Jingxing looked at Liu Chih-Ping: "We have considered this. Their biggest strategic need now is time."

"What do you mean?" Liu Chih-Ping frowned slightly.

Xie Jingxing blinked and said nothing. Zhu Xiaohu made up an excuse and walked out of the bedroom and closed the door.

The pure financial investors behind Didi and Kuaidi have different demands from Tencent and Alibaba, which are strategic investors. In essence, they don’t particularly care whether the online ride-hailing industry is led by Xie or Liu.

He wanted to check and balance Xie Jingxing out of fear of affecting future exit profits.

The core consideration of Tencent and Alibaba is the mobile payment port. For example, after the merger, they simply set WeChat payment as the default option on the payment page and folded and hid the Alipay payment option, which was enough to make Alibaba feel very upset.

Regarding the strategic layout, it is difficult for Alibaba to easily give in and agree to the merger when Xie Jingxing may run away at any time.

In the living room of the hotel suite, Zhu Xiaohu was thinking secretly in his mind while chatting with Lu Chuanwei in random words.

“I heard that Tencent established the first Internet bank a few days ago.”

In the bedroom, Xie Jingxing deliberately slowed down his speech and changed the subject, "The average daily transaction volume of WeChat Pay should be over 500 million orders now, right?"

"It's much better than we expected." Liu Chih-Ping tilted his head to look at Liu Qing in approval.

As of now, Didi’s user base has exceeded 850 million, with the highest daily order volume exceeding 70 million and the daily average remaining at around million orders, supporting % of WeChat Pay’s business volume.

From this perspective, Didi is no longer a startup that can be easily manipulated by investors. They have reason to respect any decision made by the management team headed by Cheng Wei.

Xie Jingxing paused for a few seconds and continued, "The market size of the online car-hailing industry has basically reached its short-term ceiling. The next wave of rapid growth will have to wait until the popularization of 4G networks. The fight with Uber is a competition for the stock market."

"About that. We've burned through more than 20 billion in a few months to cover all the markets that can be developed quickly, and the rest need to be polished slowly." Liu Chih-ping agreed.

"So, in this temporarily stable stock market, it is a good idea to burn money on a platform that has nearly 10 million transactions per day."

Xie Jingxing sorted out his thoughts and finally asked: "Doesn't your mobile payment division plan to do anything?"

"Put yourself in their shoes. If Alibaba sees that you have established the first Internet bank and have a stable mobile payment portal with tens of millions of users, would they want to do something?"

He answered first: "Alibaba will certainly launch an Internet banking project as soon as possible. Alipay has already launched a consumer loan business called 'Huabei' before the New Year."

Xie Jingxing said a lot and said it very tactfully, but it still made Liu Chih-Ping suddenly tense.

'Virtual credit card'. After Alibaba launched Huabei, Tencent has been preparing to develop the 'virtual credit card' project.

The function is the same as that of a credit card, and it can provide not only consumer loans but also cash loans.

The product logic is completely different from that of credit cards. Credit cards are subject to risk control supervision by the financial system, and industry standard rules are formulated at the national level. Traditional banks can only make some redundant adjustments to the rules.

'Virtual credit cards' are relatively less regulated, and cannot even be called regulated. They fall within the scope of private enterprise business operations, and risk control and supervision are decided by the enterprise itself.

Furthermore, compared with online payments such as e-commerce, offline mobile payments in daily life such as ride-hailing with extremely high transaction frequencies naturally have the need to use credit cards.

Didi currently holds a 52% market share in the online car-hailing market, while Kuaidi accounts for 38%. Using reverse data, it can be concluded that the combined number of users of the two companies is around million, and the average daily orders are well over million.

This means that a very considerable "virtual credit card" traffic entry point is right in front of us. Based on this, Tencent is ready to take action, and Alibaba is also not idle.

Putting aside their battle of wits with national regulators, just looking at the market, Kuaidi's market share has been beaten by Didi by more than ten percentage points.

With the entry of strong rival Uber China, giving it some time to adapt to its development and start high-intensity competition, Kuaidi, which even Didi can't beat, will see its market share shrinking.

If Alibaba does not want to watch Tencent come up with a "virtual credit card" that is more powerful than "Huabei" and use the online car-hailing industry to expand wildly, it must come up with some solution.

In any case, Uber China will not play such a suicidal game with Alibaba, and it has no better choice than to merge with Didi.

"The longer we delay, the weaker it will be. Alibaba may not care about the offline mobile payment port of online car-hailing, but it certainly does not want to see you monopolize the offline payment port to expand derivative financial business." Xie Jingxing concluded.

Liu Chih-ping thought for a moment and said, "That's it. Let's talk to them as soon as possible. If we can't reach an agreement, we'll talk about it later."

"Don't be here, let Liu Qing talk to Lu Chuanwei." Xie Jingxing started to chase people away without any courtesy.

Liu Chih-Ping did not comment, walked out of the bedroom with mixed feelings, and took Zhu Xiaohu with him to say goodbye.

A few minutes later, Xie Jingxing and Liu Qing came to the living room. Lu Chuanwei was playing with a Rubik's Cube, twisting it with his hands and unable to hide his restlessness.

The three of them sat down, Xie Jingxing sat on the long sofa in the middle, Liu Qing and Lu Chuanwei sat on the single sofas on both sides facing each other, with a coffee table in between.

Lu Chuanwei threw the Rubik's Cube aside, knowing that this was the ultimate negotiation, and if they couldn't come to an agreement, they would just go their separate ways and go to war immediately.

"Let's merge our two companies, and you take the money and exit."

Liu Qing's words were concise and stiff, not like someone with more than ten years of investment banking experience. Lu Chuanwei was speechless, looked at Xie Jingxing and said with a frivolous smile: "Too insincere."

"Uber's strategic cooperation with Baidu is comprehensive, including Baidu Maps, Baidu Wallet, and software distribution. These all require time to connect."

Liu Qing did not take it as an offense and explained: "Every second wasted on our side of the merger is a missed opportunity. At this moment, President Cheng is holding a mobilization meeting before the battle in the company."

“So what are your internal expectations for the policy risks of the merger being exposed?”

Lu Chuanwei was still considerate enough to ask the question in a roundabout way, using commercial anti-monopoly as an excuse.

"Uber just wants to delay. Our idea is not to let it get its way. So if you nod today, we will proactively report to the Ministry of Commerce tomorrow morning. We will work together to resolve any commercial antitrust policy risks that may be involved."

Liu Qing spoke frankly and openly: "There is also the matter of Mr. Xie. Our investors proposed that Mr. Xie transfer his equity, but Mr. Cheng and I did not agree."

"It takes time to transfer equity, and we trust Mr. Xie. It's that simple."

Lu Chuanwei was stunned. He didn't expect that Didi was so extreme and wanted to destroy Uber at all costs.

Even if they don't consider whether Xie Jingxing is trustworthy internally, they still have to pretend to appease the acquirer Kuaidi, right?
"You can communicate with the investors now. If they accept it, then we can merge with them. If not, then that's it." Liu Qing pressed on.

Lu Chuanwei was speechless for a moment, staring at her up and down, and then glanced at Xie Jingxing: "Investors always respect the ideas of our founding team."

"What do you think?" Liu Qing asked again.

Lu Chuanwei's face turned cold: "I don't feel that you are sincere."

"Sincerity is not just words. It's a 45% share swap and acquisition, and I will give you and your team % of the equity." Liu Qing directly stated the price.

The merger of Didi and Kuaidi is a "merger and acquisition" in the M&A business. The main transaction methods include cash payment, stock exchange payment, stock exchange + cash + bonds and other mixed payments.

Just talking about the 55% stock exchange M&A model, it is equivalent to Didi and Kuaidi jointly registering a new company, with Didi holding 45% of the shares of the new company and Kuaidi holding % of the shares.

The former currently has a post-investment valuation of approximately US$35 billion and holds a 52% market share.

The latter holds a 38% market share and recently completed a round of financing of US$4 million led by the US dollar fund Tiger Fund and followed by Alibaba. The overall post-investment valuation is about US$25 billion.

After the merger, the overall valuation of the new company is expected to be US$80 billion, and many investors are rushing to invest.

According to this ratio, the faster one gets the advantage. Lu Chuanwei pondered and said, "If we exchange 100% of the shares, we will be stuck. And how to solve the management model after the merger?"

"Uber has at least $10 billion in cash to burn through subsidies. We can't move the funds on our books. You should understand this. If you want to cash out after the acquisition, I will help you find an investor to take over."

Liu Qing took a breath and said, "Secondly, as the old saying goes, there is no two suns in the sky and no two rulers in a country. After the merger, someone must be the head of the family and someone must condescend to be the assistant."

"If you want to stay, I'll give you my position."

Lu Chuanwei was silent. Putting himself in Cheng Wei's shoes, he thought that Cheng Wei would never be the second in command. Could he be the one to do that?
In other words, although Liu Qing acted sincere and honest, she wanted him to get out but didn't want to pay him more.

Since they offered a 45% stake right from the start, it wouldn't be too much to at least raise the price a bit...

"Boss Lu, if I let you take over the new company, can you beat Uber?" Xie Jingxing suddenly asked.

Lu Chuanwei smiled and asked, "Mr. Xie, are you sure?"

"Have."

Xie Jingxing only replied with one word, took out his phone, opened WeChat to create a group, and added Xiao Ma Ge, Mr. Ma, Zhu Xiaohu and other investors to the group chat.

He stood up and held out his hand: "We will kill Uber, and the war will start tomorrow."

45% of the shares, not a single cent will be added. From tomorrow on, Kuaidi will also be under Didi’s firepower, and there will be no more chances for a merger.

"Lao Lu, let's merge and take Uber together!" Liu Qing said in a sharp voice.

Lu Chuanwei slowly stood up, looked at Xie Jingxing with bloodshot eyes, and smiled: "Should I say I do now?"

…………

Late that night, Kuaidi’s founding team and the commissioned M&A team rushed to Beijing and met with Didi’s M&A team in a hotel suite.

An entire floor of the hotel was booked, and Lu Chuanwei and Liu Qing stayed in two rooms next to the negotiation suite.

There was endless debate and argument, with the heads of the two M&A teams constantly entering and rejoining the negotiations with their employers' latest instructions.

"Tens of billions of subsidies will become the norm. Didi is not afraid of any rival, whether it's Kuaidi or Uber. Did you see the news yesterday? Mr. Xie gave Kalanick a watch. He said it was a consolation prize for paying the losers in advance."

The moon sets and the sun rises. When the sun rises again, Cheng Wei said this in an interview with reporters.

[China, India, the United States, the United Kingdom, we will fight Uber in all regions of the world until one side falls. ]

At the same time, Xie Jingxing sent a message in the WeChat group he formed last night. Lu Chuanwei was the first to respond with a thumbs-up emoji, and Xiao Ma Ge sent a smiley face emoji.

Teacher Ma quietly changed the name of the WeChat group to "Eastern Invincible".

"Do you really want to fight like this?"

Liu Qing, looking tired, made two cups of coffee and asked.

Xie Jing Xing put away his phone and threw a sugar cube into her cup: "Although I really don't want to boost others' ambitions and destroy my own prestige, we need time."

"There are commercial antitrust factors, and the merger will be completed in the middle of next month."

Liu Qing took a sip of coffee and pursed his lips: "It's sweet."

"I'll try to urge it, and it should be done by the end of this month or the beginning of next month." Xie Jingxing disagreed.

Liu Qing raised his eyebrows: "Why are you rushing me?"

"It's a commercial secret, I can't tell you." Xie Jingxing blushed.

Liu Qing rolled his eyes and drank the coffee in one gulp: "Pah, it's so bitter."

"Anyway, if you really want to eat tender beef, I can consider bringing more dowry."

"Then I have to ask my husband if he agrees."

"..."

Xie Jing Xing was speechless. Married women were so fuckable.

(End of this chapter)