Grab acquires Uber's share of business in Southeast Asia

29 March, 2018, 02:24 | Author: Salvatore Jensen
  • Uber has agreed to sell its Southeast Asia business to rival Grab		
	Jon Russell

   	7 hours

Uber will sell its business in Southeast Asia to a local competitor, Grab, the ride-hailing company announced late Sunday, in a deal that experts say is created to position Uber for an initial public offering next year. The deal will also see Uber CEO Dara Khosrowshahi joining the board of Grab.

As it stands, Grab operates in eight countries.

Grab has always been the dominant force in ride-hailing in Southeast Asia and speculation mounted that a deal with Uber was on the cards after Japanese financial titan Softbank invested huge sums in the USA firm.

Uber has announced plans to sell its south-east Asia business to the bigger regional rival, Grab.

In China, Uber has sold off its local business to competitor Didi Chuxing, also taking a stake in the Asian firm.

Grab have said that they will try to keep changes to a minimum so all Uber Eats restaurants will be listed in GrabFood and all app history and benefits will be retained along with payment structures.

According to Uber in San Francisco, selling Southeast-based Uber is a measure to cut potential losses proposed by 2019.

Uber has raised more than $20 billion in funding since its inception, and it is one of the most valuable technology startups in the world. As a result of this deal, shares in Singapore's ComfortDelGro Corp. increased by 3% on Monday.

Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion previous year and is facing fierce competition at home and in Asia, as well as a regulatory crackdown in Europe.

"Today's acquisition marks the beginning of a new era", said Anthony Tan, Chief Executive Officer of Grab.

Uber's official statement is of course trying to spin it positively, saying they were able to grow the business after investing $700 million in the region. And Uber was said to become profitable by 2022 through series of marketing strategies. But its latest exit suggests Uber is more than ever dependent on its home market of North America, not unlike Khosrowshahi's previous US-centric employer, Expedia Inc.

Uber, which is preparing for a potential initial public offering in 2019, lost $4.5bn previous year and is facing fierce competition at home and in Asia, as well as a regulatory crackdown in Europe.

This is just the latest worldwide retreat by Uber, which sold off its operations in China in 2016 and in Russian Federation in 2017. "The answer is no", Khosrowshahi said in a note to employees that was shared with Reuters.



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