It is no longer news that the ride-hailing giants has businesses in most part of the world including Southeast Asia , but the news is that Uber today Monday, signed a deal to sell its business to SouthEast Grab, it’s rival in the region.
As part of the procurement, Uber will take a 27.5 percent stake in Grab, with Uber CEO Dara Khosrowshahi joining Grab’s board.
Grab will take over all of Uber’s businesses, including its ride-sharing, food delivery and payments and financial services in Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, according to a statement.
Asia isn’t the first place Uber is retreating. The ride-hailing company sold its operation in China to Didi Chuxing its rival, which is one of the country’s biggest ride sharing provider, in August 2016. Rumours about Grab’s acquisition have been swirling since Softbank an investor with Grabs confirmed its investment in Uber last December.
Grab has raised more than $4 billion to date and was last valued at $6 billion. Beyond its car and taxi-hailing services, the company also has a payments platform called GrabPay and recently launched a financial services platform. As part of the merger, Grab will also be acquiring Uber’s food-delivery business, UberEats, in Southeast Asia.
Khosrowshahi wrote in an email to Southeast Asia employees:
“I’m conscious that much of the hard work happened before I arrived, and I want to recognize the operations you have built across these eight countries and “After investing $700 million in the region, we will hold a stake worth several billion dollars, and strategic ownership in what we believe will be the winner in an important global region.
Khosrowshahi also added that the transaction between the two companies, will help the company focus on the core markets like India, Latin America and the Middle East. Khosrowshahi wrote:
“It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind, from China to Russia and now Southeast Asia, “The answer is no. One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors. This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.”
Grab has long touted its hyper-local advantage over Uber. Their deep knowledge of the nuances of each of the eight countries arguably has helped the company expand outside of car and taxi-hailing, into more diverse services like payments and financial services. This merger is an indication that Uber recognised that advantage Grab has over them.