Uber exit from Southeast Asia will not impact India operations

Uber Sells Southeast Asian Operations to Rival Grab

Ride-hailing firm Uber Technologies Inc has agreed to sell its Southeast Asian business to bigger regional rival Grab, the firms said in a statement on Monday, marking the US company's second retreat from an Asian market. Uber's local representatives there have repeatedly insisted that, despite SoftBank's favored strategy, the company isn't pulling out of that continent.

While SoftBank and Didi are big investors in both companies, the deal considered to be huge for Grab, which has about 5 million drivers in 195 cities, recording 90 million downloads of its app and now valued at $6 billion. And in 2016, Uber sold off its local operations to the dominant Chinese ride sharing service, Didi Chuxing.

As part of the acquisition, Uber will take 27.5% stake in Grab and Uber CEO Dara Khosrowshahi will join Grab's board. New entrants and the strength of second-place regional players such as Lyft Inc.in the USA have complicated those efforts.

Uber has been trying to compete with Grab in eight fast-growing markets across Southeast Asia, including Singapore, Indonesia and Thailand.

For Grab, the deal is a boon for its meal-delivery service, which will now merge with Uber Eats. Financial details were not disclosed.

"While M&A will always be an important value-creation tool for our company, going forward we will be focused on organic growth - growth that comes from building the best products, services, and technology in the world, and re-building our brand into the mobility brand that riders, cities, and drivers want to support and partner with", he said.

More news: Pendency of cases: Rahul Gandhi hits out at government

"Today's acquisition marks the beginning of a new era", said Grab CEO and co-founder Anthony Tan.

As far as Uber is concerned, the pull out from the region could help it cut losses ahead of a planned initial public offering in 2019. This deal would make them the leader in the region on the grounds of cost efficiency.

The move follows the United States firm's retreat from China and Russian Federation and comes as new chief executive Dara Khosrowshahi attempts to turn its fortunes around.

Grab, which started out as a taxi-hailing app in Kuala Lumpur in 2012, became the region's dominant ride-hailing service in past years with $4 billion raised from investors.

However, mergers and consolidations seem to be the answer on this, especially after Japan's Softbank Group made a large investment in Uber earlier this year.

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