Send me real-time posts from this site at my email
Motley Fool

Part of Uber's Stake in Grab to Be Acquired by Alibaba for $3 Billion

Alibaba (NYSE: BABA) is reportedly poised to make a $3 billion investment in Asian ridesharing company Grab by buying a portion of the stake owned by Uber Technologies (NYSE: UBER).

Bloomberg reported early Monday that people familiar with the negotiations say the deal would give the Chinese e-commerce giant access to Grab's millions of customers, delivery fleet, digital wallet, and its financial services business.

Image source: Getty Images.

Grab, based in Singapore, is Southeast Asia's largest provider of ride-hailing services; deliveries of food, grocery, and packages; scooter rentals, and cashless payments. It operates in Singapore, Japan, Cambodia, Vietnam, and four other countries in the region. It had a 95% share of the ridesharing market in 2017.

Alibaba acquired a controlling interest in Singapore-based e-commerce company Lazada in 2016, but has been losing share to Tencent-backed Shopee. Analysts suggest Alibaba could use Grab's services to grab back more of the market.

Uber acquired a 27.5% stake in Grab in 2018 when Uber sold its business to its Southeast Asian counterpart in a bid to focus on its core markets. As part of the deal, Grab has to go public by 2023 or it will pay Uber $2 billion.

Japan's SoftBank Group (OTC: SFTBY), which is a major Uber shareholder as well as a big investor in most of Southeast Asia's ride-hailing companies, has been pushing Uber to divest its stake in Grab, along with other ridesharing operations, including China's Didi Chuxing and Russia's Yandex.

SoftBank has a $3 billion stake in Grab and an $11.8 billion position in Didi Chuxing.

By making the sizable investment in Grab, Alibaba may be looking to turn around Lazada, which has been beset by turmoil and this summer appointed its third CEO in three years.

10 stocks we like better than Alibaba Group Holding Ltd.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Alibaba Group Holding Ltd. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 1, 2020

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd., Tencent Holdings, and Yandex. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue