Uber is said to announce sale, for a stake of 25% to 30%
A deal will mark Uber’s exit from yet another major market
Uber Technologies Inc. has reached an agreement to sell its Southeast Asian ride-hailing business to rival Grab and could announce the deal as early as Monday morning in Singapore, people familiar with the matter said.
The agreement — which includes all of Uber’s operations in Southeast Asia as well as Uber Eats in the region — gives the U.S. company a stake of between 25 percent and 30 percent in the new combined business, the people said, asking not to be identified ahead of an official announcement. The deal, which Bloomberg outlined earlier this month, marks Uber’s operational exit from yet another major market and hands a victory to Grab as it battles local competitor Go-Jek.
SoftBank Group Corp., a major backer of Grab’s and Uber’s as well as China’s Didi Chuxing, has pushed consolidation to improve the profitability of a global ride-hailing business that bleeds billions of dollars a year. New entrants and the strength of second-place regional players such as Lyft Inc. in the U.S. have complicated those efforts.
Representatives for Grab and Uber declined to comment.
The deal represents another major retreat from international markets for Uber. Travis Kalanick, its former chief executive officer, sold Uber’s business in China in 2016 in return for a 17.5 percent stake in Chinese ride-hailing leader Didi Chuxing. Then the ride-hailing giant agreed to sell its Russian business to Yandex — just before Dara Khosrowshahi took over as chief executive.
Khosrowshahi has been pushing to clean up the company’s financials in preparation for an initial public offering next year. Pulling out of markets like Southeast Asia would boost profits at a company that has burned through $10.7 billion since its founding nine years ago. Khosrowshahi signaled during a trip through Asia last month that he is committed to key markets such as Japan and India.
For Grab co-founder and CEO Anthony Tan, the truce would bring to an end a bruising battle for leadership in a Southeast Asian ride-hailing market forecast to reach $20.1 billion by 2025. The companies have been locked in a struggle for control of as many cities as possible across Southeast Asia, home to 620 million people.
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. It was most recently valued at $6 billion, according to CB Insights. Grab, which has more than 86 million mobile app downloads, currently offers services in more than 190 cities across Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia.