Uber will take a 27.5 percent stake in Grab, which will take over the Silicon Valley company's ride-hailing and food-delivery businesses in the region.
Zoey is CNET's Asia News Reporter based in Singapore. She prefers variety to monotony and owns an Android mobile device, a Windows PC and Apple's MacBook Pro all at the same time. Outside of the office, she can be found binging on Korean variety shows, if not chilling out with a book at a café recommended by a friend.
Grab will take over all of Uber's businesses, including its ride-sharing, food delivery and payments and financial services in Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, according to a statement.
As part of the acquisition,
will take a 27.5 percent stake in Grab, with Uber CEO Dara Khosrowshahi joining Grab's board.
It's not Uber's first retreat from Asia. The ride-hailing company sold its operations in China to Didi Chuxing, the country's biggest ride-sharing provider, in July 2016. Rumours about Grab's acquisition have been swirling since Softbank, an investor in Grab, confirmed its investment in Uber last December.
Troubles did not end there, with governments around the world placing more scrutiny over the company for its apparent disregard for local regulations. Uber was driven out of cities including London, although it also managed to return to others like Taiwan and Barcelona following efforts to become compliant with rules. Last week, one of its driverless cars was involved in a fatal crash in Arizona, forcing the company to stop its self-driving operations in the US and Canada.
"Today's acquisition marks the beginning of a new era," said Anthony Tan, group CEO and co-founder of Grab. "The combined business is the leader in platform and cost efficiency in the region. Together with Uber, we are now in an even better position to fulfill our promise to outserve our customers," he added.
Calling the deal a "testament" to Uber's growth across the region over the last five years, Uber CEO Dara Khosrowshahi added: "[The deal] will help us double down on our plans for growth as we invest heavily in our products and technology to create the customer experience on the planet."
Upon the announcement, Grab sent out an alert to its customers across the region, explaining that the two platforms will soon be merging within the Grab app.
How authorities will take to the deal -- which involves two of the most dominant players in the market -- remains to be seen. In Singapore, a tie-up between Uber and local taxi giant, ComfortDelGro, got the attention of the competition watchdog, which was concerned the partnership is anti-competitive in nature. The city-state prohibits mergers of such nature.
When asked, a spokeswoman for the Competition Commission of Singapore said the group is aware of the merger and has written to the parties to clarify details of the acquisition.
"In the event CCS finds that a merger situation is expected to result in a substantial lessening of competition, [the group] has powers to give directions to remedy it," said the spokeswoman.
"For example, CCS can require the merger to be unwound or modified to prevent the substantial lessening of competition. CCS may also consider issuing interim measures prior to the final determination of the merger," she added.
First published March 25, 8:32 p.m. PT. Update, March 26 at 2:12 a.m. PT: Adds comment from the Competition Commission of Singapore.