Beijing (PingWest)- China’s largest classified marketplace 58.com will buy Nadaq-listed online used automobile dealer Uxin’s used car auction business for USD105 million, 58.com said in announcement on March 24 (Tuesday).
Under the terms of the purchase agreement, the deal covers the assets and liabilities related to Uxin’s B2B online user car platform, the transactions are expected to complete by the first half of 2020 subject to customary closing conditions.
Commenting on the deal, Yan Jinbo, chairman and CEO of 58.com said “We are already a leading B2C service provider that generate significant business opportunities and potential clients to user car dealers in China. With the addition of Uxin’s B2B auction platform, we can expand the options offered to dealers.”
Yao added that the two companies will partner to provide more diversified services and integrated solutions to customers upon the completion of the deal.
The deal come at the time when Uxin is struggling with operational difficulties and slowing car sales in Chinese auto market mainly due to the Covid-19 outbreak.
After announcing salaries cut in February, Uxin has suspended an unknown number of its employee from working starting from March due to operational difficulties.
According to data issued by China Passenger Car Association, passenger car sales in China dropped 79.1% year-on-year in February, a period when the confirmed case of the pandemic peaked in the country.
With a large network of over 1,300 service centers across over 250 cities in China, Uxin allows consumers to purchase used cars via an online platform with value-added service including car inspection, car insurance, warranty, logistics and others. Uxin has been publicly traded on Nasdaq since June 2018, when it raised USD400 million in its IPO.
Uxin’s tie with 58.com can be traced back to March 2019, when Uxin raised USD230 million from 58.com through USD230 million worth of convertible note. Explaining the rationale behind the strategic investment, 58.com’s CEO Yan Jianbo said that the deal would allow 58.com businesses to benefit from Uxin’s broad offline transaction-related expertise.
“We see enormous growth potential in China’s used-car market and believe that the volume of used-car transactions will overtake that of new cars in just few years,” Yao said.