China's two biggest ride-hailing competitors are teaming up.

Didi Chuxing and Uber China will join forces to end a long-standing rivalry and create a new company worth approximately $35 billion. The news, first reported by Bloomberg, was later confirmed by Uber CEO Travis Kalanick in a Monday statement.

"I have no doubt that Uber China and Didi Chuxing will be stronger together," Kalanick wrote. "That's why I'm so excited about our future, both in China—a country which has been incredibly open to innovation in our industry—and the rest of the world, where ridesharing is increasingly becoming a credible alternative to car ownership."

According to terms of the agreement, Didi will make a $1 billion investment in Uber, the Wall Street Journal reports, while Uber China will own 20 percent of the merged company. The move, Kalanick said, is a hail Mary for both organizations, neither of which have been able to turn a profit in China. "Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term," he wrote.

After three years, Uber currently operates in more than 60 Chinese cities, and plans to expand into another 30 soon. Didi, meanwhile, operates in 400 areas, and offers taxis, private cars, ride-sharing, and other services, facilitating more than 11 million rides per day—or 1.43 billion—in 2015.

Founded in 2012 as Didi Dache, the start-up merged with rival service Kuaidi last year to become Didi Chuxing. In May, Apple announced a $1 billion investment in the taxi firm.

Though ride-hailing services have been operational in China for some time, the local government only last week gave its blessing to the nascent industry, releasing guidelines covering the rules and regulations of online ridesharing.

Didi Chuxing did not immediately respond to PCMag's request for comment.