Singapore/New Delhi, Mar 26 (PTI) Cab hailing firm Uber has decided to sell its ride and food delivery businesses in Southeast Asia to Singapore-based rival, Grab.
As per a deal, Grab is taking over the operations of Uber in the region, with the US-based company to receive a 27.5 per cent stake in the business in return.
This will however not impact Ubers operations in India, where it is locked in an intense competition with local rival Ola, sources close to the development said.
The move will free up capital to execute on Ubers growth plans in core markets like North America, Latin America, India and Europe and invest in engineering and product development, they said.
Uber sold its China operations to rival Didi Chuxing in 2016 in a deal worth USD 35 billion. The US firm has taken 5.89 per cent stake in Didi. Last year, Uber merged in Russia with the taxi-hailing app of internet giant Yandex.
As per the sources, the latest stake-sale would be Ubers last minority deal as the company has no intention of taking minority stake in any future merger with global competitors.
There have been speculations about Uber and Ola joining forces in the Indian market. These got stronger after SoftBank - an investor in Ola - joined Uber as an investor committing over USD 1 billion in the US-based firm.
Uber CEO Dara Khosrowshahi, on his recent visit to India had said, India is a core market for the company. He had indicated that he would not go by the advice of investors like SoftBank, who want the US-based firm to scale back to countries where it already has a strong market position.
Uber has been pumping in substantial funds to fuel its growth in India. In 2015, Uber announced an investment of USD 1 billion in India to expand its services here. It has also set up a response and support centre in Hyderabad with an investment of USD 50 million.
In an e-mail to employees post the Grab deal, Khosrowshahi said Uber will get 27.5 per cent stake in the combined company.
"Around 500 colleagues across the region will transition to Grab, and over the coming weeks we will help our customers move to Grabs apps," he added.
He pointed that after investing USD 700 million in the region, Uber will hold a stake "worth several billion dollars, and strategic ownership in what we believe will be the winner in an important global region". PTI SR ANZ ANU ANU