Uber Technologies Inc. has confirmed plans that it will be selling off its Southeast Asian operations to Grab and in turn it will garner a 27.5 per cent stake in a combined entity.
Grab raised about $2.5 billion last July from Didi, SoftBank and others in a deal valuing the company at around $6 billion.
In a statement by Grab CEO, Anthony Tan said, "Today's acquisition marks the beginning of a new era". Integrating Uber's business into Grab's existing portfolio will help the O2O mobile platform lead the ride-hailing as well as food delivery market in Southeast Asia.
The deal sanctions Uber to sustain a foothold in the growing prosperous market of 640 million people while slashing its losses.
But Grab, which operates in 195 cities in eight Southeast Asian countries, became the dominant force in ride-hailing, leaving its troubled U.S. rival struggling.
Poe, who chairs the Senate public services committee, said there should be no service disruption despite the deal which the two ride hailing companies have finalized, as reported by Bloomberg News.
Uber offloads services in Southeast Asia to regional rival Grab, with a departure from India possibly in the works.
The countries included in the operation are: Cambodia, Indonesia, Malasia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
"Didi fully supports Grab's acquisition of Uber's Southeast Asian operations, and looks forward to continuing a long-term relationship with Grab as a strategic investor", a Didi representative told Caixin.
Why Grab? Why not Uber?
Maybank Kim Eng and Credit Suisse also said in their reports earlier this month before the Grab-Uber merger was announced that ComfortDelGro would benefit from a rationalisation of competition. "So the most important thing is that service to our commuters will not be disrupted", Poe said in a statement Monday (March 26). For instance, Grab let passengers text drivers via a chat feature within the app with in-built automated translation feature. This exit may suggest that Uber is depending on its success in North America markets and would not put up similar fights outside its local base.
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