Singapore based Grab, the market leader in Southeast Asia’s ride hailing market, is close on the heels of acquiring Uber Technologies business in the region, according to sources close to the matter. Sources claim that the high profile deal is most likely to be sealed in the coming days.
This deal is reportedly similar to the Uber-Didi Chuxing deal that was struck in 2016, which implies that Uber would sell its business to Grab in return of substantial equity stake in the company. U.S ride hailing giant’s stake in Grab may wary from 15% to 20%, if sources are to be believed.
Reports of Uber’s plan to sell off its Southeast Asian business to Grab have been doing rounds over the past few weeks. Japanese investment giant SoftBank (common investor in both companies) is believed to be the main factor behind this truce. SoftBank, which picked up 15% stake in Uber earlier, want ride-hailing giant to clear off all the financial mess before it goes for IPO next year.
Most experts seem to agree with SoftBank’s move as exit from losing making Southeast Asian market would augur well for Uber in the long run. Most importantly, the exit move may also help in renewing investor’s interest in Uber’s highly anticipated public issue. The ride hailing giant has burnt close to $10.7 billion in Southeast Asian market but still could not close the gap with market leader Grab.
If Uber-Grab deal does materialize, it would mark U.S. ride hailing giant’s third high profile exit. It was forced to exit China in 2016 and followed by Russia next year. Now the latest news doing the rounds is that Uber is also planning to exit from Indian market, where the home grown ride hailing company Ola is giving a tough ride to Uber.
However, Uber’s new CEO Dara Khosrowshahi, who was in India last week to meet government officials, dismissed these reports.
Industry experts believe that all these high profile exits will help Uber to sharpen its focus on highly lucrative markets where it is actually making profits. This includes markets like United States, Europe and Latin America.