Uber is selling its Southeast Asia business to rival Grab

The sales price has not been disclosed, but Uber will receive a 27.5% stake in Grab as part of the deal, reports Recode. Additionally, Uber CEO Dara Khosrowshahi will be joining Grab’s board of directors, while Grab will be taking on 500 Uber employees across the region and acquiring UberEats in Southeast Asia. In an email to Uber’s Southeast Asia employees, Khosrowshahi said:

“I’m conscious that much of the hard work happened before I arrived, and I want to recognize the operations you have built across these eight countries. After investing $700 million in the region, we will hold a stake worth several billion dollars, and strategic ownership in what we believe will be the winner in an important global region.”

Khosrowshahi also noted that with the Grab deal, this was now the third major market Uber has exited:

“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 Russia and now Southeast Asia. The answer is no. One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors. This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.”

As for Grab, the Uber deal will allow it to rapidly expand its food delivery business, which is currently only in two markets. The deal also could have serious implications for Indonesian competitor GoJek, who will have to face a much stronger Grab now.