BENGALURU: Ride-hailing provider Ola is in talks with Uber to acquire the latter's operations in India, said a person familiar with the development.
The deal, according to him, is being brokered by SoftBank, which is an investor in both the companies.
These talks had been happening since the last 12 months and expected to conclude in the next couple of months, he said. ``Currently, discussions are on,” the person said. He did not want to disclose his identity as he is involved in the talks.
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Uber declined to comment on the deal and mailed an earlier statement of its CEO issued on March 26.
Last year, Ola secured a $2 billion funding from investors such as SoftBank Group Corp. and Tencent Holdings. India's cab-hailing market is estimated at $10 billion. Ola and its rival Uber have been investing in vehicles and technology to stay ahead.
On March 26, Uber sold its South East Asian business to Singapore-based rival Grab for a 27.5% stake in the combined entity. Japanese billionaire Masayoshi Son’s SoftBank Group Corp., which became the biggest shareholder in both the firms after its recent multi-billion dollar investment in San Francisco-based Uber, was seen as a clear winner from the deal.
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“The great news about our Grab deal is that it allows us to double down to invest aggressively in our core markets —and we consider India very much as core to Uber’s success,” Mr. Khosrowshahi said at the time. “We’d 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,” he said.
SoftBank wants a successful IPO for Uber, the person, who didn't want to be identified said. “When any company or organisation goes for an IPO, what is very important is the financials of that organisation.”
Uber CEO Dara Khosrowshahi has said the company may go for a public offering by 2019.
“The great news about our Grab deal is that it allows us to double down to invest aggressively in our core markets—and we consider India very much as core to Uber’s success,” Mr. Khosrowshahi stated. “We’d 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,” he said.
SoftBank wants a successful IPO for Uber, the person, who didn't want to be identified said. “When any company or organisation goes for an IPO, what is very important is the financials of that organisation.”
According to Ola, it has a market share of between 60-70% and more than one million driver partners in India. Ola operates in 110 cities and clocks about 2.3 million rides every month.
“SoftBank, being an investor in both the companies, does not want to burn their candle from both ends. After all, it is their money which is getting spend. That is clearly the motivation of bringing both the companies together,” the person said. "In India's transformative digital journey, Ola will be always an active and integral part for decades to come. SoftBank and all other investors are committed in realising this ambition. Ola is always actively looking for opportunities for expansion of its footprint," a Ola spokesperson said.