Southeast Asia’s biggest ride-hailing firm, Grab, is in advanced negotiations to buy parts of Uber Technologies Inc’s business in the region, said a source with knowledge of the talks, in what would be Uber’s second retreat from an Asian market.
Ride-hailing companies have been offering heavy discounts and promotions in Southeast Asia, a region of about 640 million people, to attract both riders and drivers. To fund their expansion plans, both Grab and Uber have raised billions of dollars from global investors.
A multi-billion dollar funding in Uber in January by SoftBank Group, already one of Grab’s main investors, had opened up the possibility of a consolidation with Grab.
Grab’s deal with Uber would be similar to the one struck in China in 2016, when Didi Chuxing bought out Uber’s China business and gave a stake in return, said the source, who declined to be identified as the talks are private. As part of the deal in Southeast Asia, Uber will get a stake in Grab, which has an estimated valuation of about $6 billion.
During a visit to India last month, Uber CEO Dara Khosrowshahi pledged to continue investing aggressively in Southeast Asia even though the U.S. ride hailing firm expects to lose money in the fast growing market. Grab declined to comment on the Reuters story while Uber did not immediately respond to Reuters’ queries.
Bloomberg reported on Thursday that Grab was close to finalizing a deal to acquire Uber’s business in certain markets in Southeast Asia and may sign a deal this week or next, citing people familiar with the matter.