Shanghai-based Yelp-like review website Dianping.com and Beijing-based group discount platform Meituan.com have merged to form the largest group buying and local services firm in China, the companies said in an announcement.
Each company is to continue operating on an independent asis, with both heads of the company serving as co-chief executives.
Financial details are not disclosed, but the two companies are reportedly exchanging shares based on a 5:5 ratio.
The combined companies will taking 80% of the group discount market in the country with a valuation of US$17 billion, according to Chinese media reports.
If completed, the deal would follow the success of Didi Dache and Kuaidi Dache, which merged in February to become the absolute leader in the app-based ride share sector in China.
Dianping and Meituan have been in fierce competition in the group buying and O2O (online-to-offline) sectors. The merger would allow both companies to focus more on improving their services to consumers.
Dianping is backed by Tencent Holdings Limited, Sequoia Capital, Google, TBP Capital, Qiming Venture Partners, Lightspeed Venture Partners, and others.
Meituan has received investments reportedly from Hillhouse Capital, Fidelity Management & Research Co., Alibaba Group Holdings Limited, General Atlantic, and others.