U.S. law firm Hughes Hubbard & Reed has advised Singapore’s Grab, the dominant ride-hailing service in Southeast Asia, on its acquisition of Uber Technologies’ business in the region, with Morrison Foerster representing Japan's Softbank Group, which has invested in both Grab and Uber.

According to Reuters, this marks the U.S. company’s second retreat from an Asian market after China. This is also the industry’s first big consolidation in Southeast Asia. 

Reuters added that an industry shakeup became likely earlier this year when SoftBank’s Vision Fund made a multi-billion dollar investment in Uber. SoftBank owns stakes in most major global ride services companies, and executives have indicated they favoured consolidation.

Under the terms of the agreement, Uber will take a 27.5 percent stake in Grab, and Uber CEO Dara Khosrowshahi will join Grab’s board. Grab was last valued at $6 billion after a $2.5 billion financing round in July, Reuters said.

However, since the announcement of the deal, first Singapore, and then the Philippines and Malaysia said that they would consider whether the Uber-Grab deal hinders competition. The expanded scrutiny of the deal in Southeast Asia could pose a major hurdle to the U.S. firm’s attempt to improve profitability by exiting its loss-making regional operation, noted Reuters.

In a rare move, Singapore proposed interim measures to require Uber and Grab to maintain their pre-transaction independent pricing until it completes a review of the deal, saying it had “reasonable grounds” to suspect that competition had been infringed, Reuters added.

The Hughes Hubbard team on the transaction was led by New York-based partner Ken Lefkowitz. The law firm also advised Grab in its July financing round last summer.

 

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