Uber Technologies, a leading name in ride-hailing services has agreed to trade of its Southeast Asian business to its biggest competitor Grab, an anonymous source having a direct idea of the deal gave this information. This deal marks Asia’s second recoil for Uber.
The accomplishment of this Uber-Grab deal will be the sole and largest consolidation in Southeast Asia region in terms of industry. The region has a population of around 640 Million and is expected to put stress on other companies such as Go-Jek of Indonesia, backed by Tencent Holdings and Alphabet Inc’s Google.
According to the transaction, in this consolidated business, Uber will have the total 30% share of this business. The source said the deal is yet to be made public and based on the anonymity he gave this information. Both the firms Grab and Uber declined to comment on the deal.
SoftBank Group Corp, who had invested multi-billion dollars in Uber and also one of the key investors of Grab, had already anticipated that South Asian business of Uber will be consolidated with Grab.
The deal of Uber and Grab are merely similar to the acquisition deal when Uber’s China business was bought by Didi Chuxing and delivered stake in return.
Dara Khosrowshahi, Uber Chief Executive during its visit in India had commented that it would continue to invest insistently in Southeast Asia, on the grounds where the company projected to lose money in the rapidly emerging market.
Billion dollars investment has been raised by both the ride-hailing service providers to both the firms to finance their expansion plans as both the service players treat the customers with promotions and heavy discounts for both customers and drivers.
Since last July, approximately $2.5 Billion funding has been raised by Grab from its existing investors such as SoftBank and Didi, which landed the company’s valuation to $6 Billion.