Grab's Acquisition of Uber in Philippines - A Win-Win Situation for Both
The Filipino competition authorities approved Grab’s takeover of Uber’s operations in Philippines. The approval is an important development for Grab and coincides with its strategy to strengthen its position in the south-east Asian region. Grab now controls more than 90% of the Filipino ride hailing market, giving it the power to control fares and services in the market.
Uber has not been successful in Southeast Asia as it tried to replicate its US strategy in the region, failing to understand local culture and specific market characteristics such as its cost sensitivity and customer behavior. In 2018, Uber decided to sell its Southeast Asian region operations to Grab for a 27.5% stake (valued approx. $1.6 billion) in the company. Considering Uber invested just $700 million in Southeast Asia between 2012-2017, gaining 27.5% stake in Grab is a good return for Uber for its exit from Southeast Asian region. The deal is also good for Softbank, a key investor in both the companies, as fighting for market share in the same region was hurting profit margins of both, Grab and Uber - Aman Madhok
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Aug 17, 2018
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