Xpeng Soars After Buying Didi Unit to Consolidate Market (1)

Xpeng Inc.’s shares soared after it agreed to buy Didi Global Inc.’s smart-car development arm in a deal that both eliminates a potential competitor in the crowded electric-vehicle market and gives it a tech-savvy partner in a new venture.

The HK$5.84 billion ($744 million) all-stock deal will see Didi emerge with a 3.25% stake in Xpeng, according to an exchange filing Monday. Xpeng shares surged more than 16% in Hong Kong trading before paring gains to close 11% higher. Its American depositary receipts gained 5% by 4:27 a.m. in New York.

As part of the deal, Xpeng plans ...