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Grab Officially Takes Control Of Uber’s Southeast Asia Operations

Grab announced today that it will acquire all of Uber’s Southeast Asia assets, confirming rumors that have been floating around the highly competitive ride-hailing market.

Grab gains control over all Uber’s assets and operations in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, including UberEats, which the company plans to leverage to expand its own food delivery service. GrabFood will offer the service in Singapore and Malaysia shortly after the acquisition, expanding the service to all major countries in Southeast Asia by mid 2018.

“The combined business is the leader in platform and cost efficiency in the region,” said Anthony Tan, Grab Group CEO and co-founder in a statement. “Together with Uber, we are now in an even better position to fulfill our promise to outserve our customers.”

The value of the deal hasn’t been made public, but in return, Uber will gain a 27.5% stake in the company, which is already valued at several billions of dollars , a source familiar with the deal said. Uber CEO Dara Khosrowshahi will also join Grab’s board.

Uber releases its grip on minority-stake market

Southeast Asia is considered one of the most competitive regions among ride-hailing apps. Uber has not disclosed its customers in the region, but Grab reported its one billionth ride last November, saying it holds 95% of the market share in third-party taxi hailing and 72% in private vehicle hailing.

Uber previously invested $700 million in the region. Now that it let go of operations in Southeast Asia, Uber will invest in research and technology development and focus on its core markets where it holds majority control, including India and Asian countries aside from Southeast Asia and China, the source said.

Talk of the deal between the major ride-hailing companies started a few months after Japanese telecom giant Softbank purchased a 15% stake in Uber at a discount. Softbank already owns stakes in Grab and India’s ride-hailing platform Ola, and it was said it had urged Uber to focus on its majority markets. However, a source familiar with the deal disputed that the shareholder influenced the deal.

Uber customers and drivers in these countries will be able to use their app for two more weeks, and then the program will prompt them to sign up for Grab.

Source: Forbes

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