Ola, Uber in merger talks; Softbank brokering deal

Taxi aggregators Ola and Uber are in merger talks, brokered by Japanese SoftBank, which is a common investor in both the companies.

"Yes, the talks have started between the top executives of the firm," a source close to the development told DH.

The sources confirmed that talks between Uber and Ola have been on for the past one year, and have intensified in the past few days.

According to the sources, Ola will acquire the Indian unit of Uber. However, sources declined to add further details.

Ola, when contacted, said that they have the backing of investors. "In India's transformative digital journey, Ola will always be 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," an Ola spokesperson said.

Although, Uber officially denied to comment on the issue, its global CEO Dara Khosrowshahi had, on Tuesday, said "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. 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."

A source close to Uber, on condition of anonymity told DH, "Grab was our last minority deal. We have no intention of taking a minority stake in any future merger with global competitors."

Athough both companies claim leadership in terms of market share, Ola has around 10 lakh driver-partners registered with it across 110 cities, while Uber in India 4.5 lakh driver partners across 31 cities.

According to independent analysts, Ola controls 70% of the Indian market, while Uber's market share is pegged at 26%.

"It is too early to know the size of the deal, but talks are on at an advanced stage," the source added.

The deal comes close on the heels of Uber selling its South East Asia unit to local rival Grab.

Softbank, which is said to be behind the sale of Uber's Southeast Asia unit to Grab is once again the key driver behind the reported deal. The Japanese company is the largest shareholder in both Uber and Ola, controlling 15% and 25% stakes in the two companies, respectively.

On November 13, 2017, San Francisco-based Uber's board approved a "multi-billion dollar" investment from Japanese internet group Softbank, which may invest up to $10 billion.

In case of Bengaluru-based Ola, SoftBank has pumped billions of dollars in five rounds spanning past four years. The total investment of SoftBank in Ola is pegged at $2.5 billion, with the last investment amounting to a whopping $1.1 billion in October 2017.