China's Xpeng to take over Didi's smart EV unit, shares soar

China's Xpeng to take over Didi's smart EV unit, shares soar

Chinese electric car company Xpeng said it will acquire ride-hailing giant Didi's smart electric vehicle unit and the two companies will form a strategic partnership.

Xpeng's shares surged around 15% in early Monday trade.

As part of the deal, Xpeng will launch an A-class model next year under a new brand, currently called MONA, aiming to expand in the mass-market segment.

"Project 'MONA' will accelerate the Company's production and sales growth and help achieve greater economies of scale," Xpeng said in a statement.

Didi will support the launch by "providing access to its mobility market" and the two companies will explore strategic cooperation in a number of areas, including marketing, financial and insurance services.

Didi will acquire around 3.25% of Xpeng shares under the deal, which could increase depending on whether production and sales targets are fulfilled.