Despite investor pressure, Mobike, ofo shun discussion of merger: report

Updated 2017-10-31 10:03:06 Global Times

A manager at Mobike, one of China's top two bike-sharing providers, told the Global Times on Monday that there is no plan at present for a merger. The manager declined to be identified.

The comment came as media reported that investors are pushing Mobike and ofo, another bike-sharing giant, into a merger.

The manager said that the company is expanding through new services, such as cooperation with two taxi-hailing apps: Shouqiyueche and Dida, for transportation in different cities.

The company will expand both domestically and internationally, he said.

According to a Bloomberg report on October 3, investors in Mobike and ofo were pushing the two into a merger that would create a company with a valuation of more than billion.

In response to that report, Mobike said it is "more advanced in technology, product and operational efficiency, and is not considering a merger."

"The market is big enough for two players. Ofo seeks market dominance and doesn't want to merge with Mobike," Dai Wei, ofo CEO, has said "several times" at internal meetings, according to news site yicai.com.

One of Mobike's earliest investors said that neither company has spoken of a merger. For Mobike, a key frontier lies beyond first-tier cities, the news report noted, but added that both companies may soon seek new funds,

"If both firms achieve market saturation in more cities and governments start to restrict [further expansion], both companies will then find pricing is the only way to compete with each other," Ding Jian, managing director and chairman of GSR Ventures, was quoted as saying in the report.

"At that point, they may be ready for a merger. But that hasn't happened yet, and both parties still have a long time to develop, many aspects to improve, and they are working on different business models," the report added.

Tencent, the key stakeholder for Mobike and Didi Chuxing, the major stakeholder for ofo, will be the key decision-makers when it comes to any merger, the news report said.

Already operating in 180 cities across 17 countries and regions, ofo has more than 32 million transactions every day with its 10 million bikes, the Xinhua News Agency reported earlier.

Mobike has expanded to more than 180 cities with about 8 million bikes, the yicai.com news report noted.

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