Japanese investment major Softbank is pushing for a merger between Indian cab-hailing service Ola and American firm Uber’s India unit, the Business Standard reported on Thursday. Softbank, which is the largest investor in both companies, is planning to consolidate its position in India, which is Asia’s fast-growing market for taxi-aggregator apps.
The talks on a possible merger have been going on for a year and may be completed in a couple of months, according to the Business Standard. Both Ola and Uber want a controlling stake in the combined entity, unlike the merger of Uber and Grab, a ride-hailing company with presence in South East Asia. After the deal, Uber will have a 27.5% stake in the company.
If the Uber-Ola deal goes through, it will be the fourth instance of the American company selling its business to a local rival. Uber had sold its China unit to Didi and its Russian unit to a company called Yandex.
While Uber and Softbank refused to comment on the merger talks, Ola said it was always looking to increase its presence in India, The Hindu Business Line reported. “In India’s transformative digital journey, Ola will always be an active and integral part for decades to come,” the company said. “Softbank and all other investors are committed to realising this ambition.”
Uber Chief Executive Officer Dara Khosrowshahi had said the deal with Grab will allow the company to “double down to invest aggressively in our core markets – and we consider India very much as core to Uber’s success”. In an internal memo to employees after the Grab deal was announced, he said, “We would, of course, look at any deals that can add value to our partners and shareholders, but we believe in controlling our own destiny in India.”
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!