Singapore watchdog probes Uber-Grab deal
Move poses hurdle to Uber’s attempt to exit S-E Asian market
SINGAPORE: Singapore’s competition watchdog said it had reasonable grounds to suspect competition had been infringed by Uber Technologies Inc’s deal to sell its operations in South-East Asia to rival ride-hailing firm Grab.
In a rare move, the Competition Commission of Singapore (CCS) has commenced an investigation into the deal and proposed interim measures that will require Uber and Grab to maintain their pre-transaction independent pricing, the watchdog said in a statement yesterday.
The proposal also requires Uber and Grab not to take any action that might lead to the integration of their businesses in Singapore, a move likely to pose a major hurdle to the US firm’s attempt to improve profitability by exiting the loss-making South-East Asian market.
It is the first time the commission has issued interim measures on any business in the country.
Uber and Grab announced the deal on Monday, marking the US company’s second retreat from an Asian market.
Under the deal, Uber will take a 27.5% stake in Grab, which is valued at around US$6bil, and Uber CEO Dara Khosrowshahi will join the Singapore-based company’s board.
CCS proposals also require both Grab and Uber not to obtain from each other any confidential information including pricing, customers and drivers.
The two firms will be given an opportunity to make written representations to the CCS upon receipt of the proposed interim measures, it said.
Singapore has a voluntary merger notification regime, and CCS has yet to receive the notification from Uber and Grab as of yesterday, although the companies have indicated their intention to file a formal merger notification, CCS said.
Grab and Uber were not immediately available for comment.
The deal is the industry’s first big consoli- dation in South-East Asia, home to about 640 million people, and is widely expected to give Uber more firepower to focus on other markets including India, as it prepares for an IPO in 2019.
Uber lost US$4.5bil last year and is facing fierce competition at home in the United States and across Asia, as well as a regulatory crackdown in Europe. The firm has invested US$700mil in its South-East Asian operations.