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Uber reportedly in talks to sell Southeast Asian business to Grab

ABR Staff Writer Published 19 February 2018

Ride-sharing company Uber is reportedly in talks to sell its Southeast Asian business to Singapore-based competitor Grab, according to a report from CNBC.

In return, Uber would receive a stake in Grab, once the deal is through. The deal, first reported by CNBC, is being considered as a way for Uber to reduce its costs ahead of its planned IPO. There is no official word either from Uber or Grab to confirm this news.

Last year Grab secured a $2.5bn round of funding and now operates in more than 100 cities across Indonesia, the Philippines, Malaysia, Thailand, Vietnam and Myanmar among others. It claims have grabbed a market share of 95% in the region.

Uber is said to take up a similar strategy in China, after it sold its business to its competitor Didi Chuxing in 2016 and had acquired 20% stake in the company. Similarly, in Russia Uber merged its local ride-hailing business with Yandex and received a 37% stake in the company.

Uber, also had a deal with ComfortDelGro last December, is under the review of the Competition Commission of Singapore.

Under the deal, ComfortDelGro will take 51% of stake in Uber-owned rental car business Lion City Holdings, valued at $642m ($489.2m)

Uber CEO Dara Kosrowshahi at the Goldman Sachs Internet and Technology conference this week stated that the company could be profitable, if it wanted to be, but it is investing heavily in new technologies and emerging markets. This means that it is assessing which markets could bring losses and which markets are profitable.

Kosrowshahi also stated that the company is all over the world now. Continuing with profitability as the agenda would compromise the company’s growth in the future.

The deal will also help Japanese investment firm SoftBank, which has invested not only in Uber, but also in Ola in India, Didi and Brazil’s 99, to exert pressure on the global ride-hailing market.

Image: Uber in talks with Grab to sell Southeast Asian business to Grab. Photo: Courtesy of powerbee-photo/FreeDigitalPhotos.net.