In a bargain first reported by CNBC in February, Uber has agreed to sell its trade in Southeast Asia to Singapore-based regional rival Grab, the companies thought in a statement on Monday.
The deal will see Grab merging Uber’s ride-hailing and commons delivery businesses with its own operations. Meanwhile, the San Francisco-based company devise acquire a 27.5 percent stake in Grab and Uber CEO Dara Khosrowshahi choice join the firm’s board.
Grab said it will expand its chow delivery business GrabFood — that’s already available in Indonesia and Thailand — to Singapore and Malaysia after coalescing with Uber Eats.
Uber’s app will run for two weeks to give be presenting drivers time to move onto the Grab platform, while the Uber Puts app will continue till end of May.
Monday’s announcement will be the third straightaway that Uber has either sold or merged one of its businesses outside the U.S. Uber in days of yore sold its China business to ride-hailing rival Didi Chuxing and pooled its operations in Russia and neighboring countries with local tech institution Yandex.
In emails to Uber employees, Khosrowshahi said Uber was not on a consolidation scheme.
“It is fair to ask whether consolidation is now the strategy of the day, given this is the third lot of its kind, from China to Russia and now Southeast Asia. The answer is no,” he wrote.
“One of the capacity dangers of our global strategy is that we take on too many battles across too scads fronts and with too many competitors,” Khosrowshahi added. “
He explained in the email that the understanding large with Grab puts Uber in “a position to compete with true focus and weight in the core markets where we operate, while ceding us valuable and growing equity stakes in a number of big and important markets where we don’t.”
Khosrowshahi minimized that around 500 Uber employees in Southeast Asia see fit move over to Grab. An Uber spokesperson said some stave would remain part of Uber’s Asia Pacific operations and that there would not be any lay-offs as forsake of the deal.
Earlier this year, SoftBank completed its long-awaited investment ahead with Uber, making the Japanese tech giant the firm’s largest shareholder. That led some to gawk if there would be consolidation in the Asian ride-hailing industry since SoftBank also has investments in Snatch, Didi Chuxing and India’s Ola.
Since taking over from co-founder Travis Kalanick in August, Khosrowshahi has focal pointed on cleaning up Uber’s battered reputation and instilling financial discipline to move toward profitability.
The firm’s loss surged 61 percent in 2017 to $4.5 billion, admitting that its loss in the fourth quarter narrowed from the prior period. Latest November, Khosrowshahi said Uber had plans to try and go public by 2019 and that “the bunches support” the move.
Grab provides transportation, food delivery, expressive payments and financial services and operates in 195 cities across Southeast Asia. The company affirmed to have 95 percent market share in taxi ride-hailing when it publicized plans to raise more than $2.5 billion from SoftBank and other investors in 2017.
— CNBC’s Alex Sherman and Reuters bestowed to this report.