Grab confirms acquisition of Uber's Southeast Asia operations

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"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 Russian Federation and now Southeast Asia".

The sales agreement will include all of Uber and Uber Eats operations in Southeast Asia, giving Uber a stake of about 25-30 percent in the new combined business.

The deal follows a month of speculation, and it will see Grab - which is valued at over $6 billion - buy up Uber's ride-sharing business in eight countries in Southeast Asia.

The sale of Uber's regional business marks the first major consolidation efforts among ride-hailing companies in Southeast Asia.

Uber has been struggling to stem increasing losses, which amounted to $4.5 billion past year, as it also tries to tamp-down corporate scandals and an internal shakeup that replaced its CEO, Travis Kalanick.

"Didi fully supports Grab's acquisition of Uber's Southeast Asian operations, and looks forward to continuing a long-term relationship with Grab as a strategic investor", a Didi representative told Caixin. Ride-hailing companies throughout Asia have relied heavily on discounts and promotions, driving down profit margins and increasing pressure for consolidation.

The Uber app will be discontinued in just two weeks, and in the meantime its drivers have to sign up to drive with Grab.

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Chief executive Travis Kalanick was ousted in June past year after missteps including allegations of executive misconduct, a toxic workplace atmosphere and potentially unethical competitive practices.

As part of the deal, Uber will take a 27.5 per cent stake in Grab, while Uber's chief executive Dara Khosrowshahi will join Grab's board.

"The economics of that market are not what we want them to be", he said at the time.

As Uber prepares for its Initial Public Offering (IPO), CEO Khosrowshahi has been trying to clean up the company's financials. In other markets, Uber faces heavy competition that has basically forced it to merge with its rivals in China and Russian Federation.

Uber CEO Dara Khosrowshahi noted that the deal showed Uber's growth across Southeast Asia over the last five years.

SoftBank and Didi are increasingly partnering up, and last July the two companies invested $2 billion in Grab.

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