Uber Technologies Inc. has reached an agreement to sell its Southeast Asian passenger transportation business to competitor Grab and will announce the deal as early as Monday morning in Singapore, in response to people acquainted with the matter, in response to Bloomberg.
The deal – covering all of Uber’s operations in Southeast Asia, in addition to Uber Eats within the region – gives Uber a 25 to 30 percent stake in the brand new combined company, the people said, asking to not be named ahead of the official announcement.
The deal, reported by Bloomberg earlier this month, marks Uber’s operational exit from one other large market and offers Grab a victory within the fight against local competitor Go-Jek.
SoftBank Group Corp., a significant backer of Grab’s and Uber’s in addition to China’s Didi Chuxing, has pushed for consolidation to enhance profitability of its billion-dollar-a-year global passenger ride business. New market entrants and the strength of secondary regional players equivalent to Lyft Inc. within the US, have complicated these efforts.
Representatives of Grab and Uber declined to comment.
The deal marks one other major withdrawal for Uber from international markets. Travis Kalanick, Uber’s former CEO, sold Uber’s China operations in 2016 in exchange for a 17.5% stake in Chinese passenger transportation leader Didi Chuxing. Uber then agreed to sell its Russian business to Yandex – just before Dara Khosrowshahi took over as CEO.
Khosrowshahi is pushing for the corporate’s funds to be so as in preparation for an initial public offering next 12 months. Pulling out of markets like Southeast Asia would boost profits for an organization that has burned through $10.7 billion since its founding nine years ago. During a tour of Asia last month, Khosrowshahi signaled his commitment to key markets equivalent to Japan and India.
Grab, which has over 86 million mobile app downloads, currently offers services in over 190 cities in Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia.
