Asia

Uber to sell Southeast Asia business to rival Grab: source

Uber's logo is pictured at its office in Tokyo

Uber’s logo is pictured at its office in Tokyo, Japan, November 27, 2017. REUTERS/Kim Kyung-Hoon

By Anshuman Daga

SINGAPORE (Reuters) – Ride-hailing firm Uber Technologies Inc has agreed to sell its Southeast Asian business to bigger regional rival Grab, a source with direct knowledge of the matter said on Sunday, in what would be the U.S. company’s second retreat from Asia.

The deal, which could be announced as early as Monday, marks the first big consolidation in the industry in Southeast Asia, home to about 640 million people, and will put pressure on rivals such as Indonesia’s Go-Jek, backed by Alphabet Inc’s Google and China’s Tencent Holdings Ltd .

As part of the transaction, Uber would get a stake of as much as 30 percent in the combined business, the source said. He did not want to be identified as the deal is not public yet.

Another source familiar with the deal said Uber would acquire a 25 percent to 30 percent stake in Grab, valuing the entire business at $6 billion, the same valuation it commanded in its most recent capital raising.

Uber and Singapore-based Grab, Southeast Asia’s biggest ride-hailing firm, declined to comment.

A multi-billion dollar investment in Uber earlier this year by Japan’s SoftBank Group Corp , already one of Grab’s main investors, had stoked expectations that Uber would consolidate its Southeast Asian business with Grab.

Grab’s deal with Uber would be similar to the one struck in China in 2016, when Didi Chuxing bought out Uber’s China business and handed over a stake in return.

During a visit to India in February, Uber Chief Executive Dara Khosrowshahi had, however, pledged to continue investing aggressively in Southeast Asia, even as the company expected to lose money in the fast growing market.

Both Grab and Uber have raised billions of dollars from global investors to fund their expansion plans, as they offer heavy discounts and promotions to attract both riders and drivers.

Grab raised about $2.5 billion last July from Didi, SoftBank and others in a deal valuing the company at around $6 billion.

Bloomberg first reported the deal.

2018-03-25T113212Z_1_LYNXMPEE2O0HP_RTROPTP_4_UBER-GRAB.JPG

(Reporting by Anshuman Daga; Additional reporting by Greg Roumeliotis in New York; Editing by Miyoung Kim, Keith Weir and Lisa Shumaker)

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s