(Reuters) – Singapore’s top taxi operator ComfortDelGro Corp will buy a 51% stake in a unit of Uber that runs a fleet of private hire vehicles, as the companies seek to bridge the gap with dominant ride-hailing firm Grab.
ComfortDelGro said on Friday the stake in Lion City, the Uber unit, was worth about S$642 million ($474.6 million), comprising cash and loans. The cash portion is worth S$295 million.
San Francisco-based Uber will retain the remaining stake in Lion City, which operates a fleet of 14,000 vehicles.
ComfortDelGro, Singapore’s biggest taxi operator, said the deal would allow its drivers to receive ride requests on Uber’s driver app, while letting Uber riders book its taxis directly.
The deal follows exclusive talks earlier this year between ComfortDelGro and Uber about a tie-up seen as helping Uber compete with Grab, its biggest rival in Southeast Asia.
Uber, which has pulled out of massive markets China and Russia, is using Singapore as a springboard to grow in populous Southeast Asia.
ComfortDelGro shares ended the day 1.6% lower amid a 1% rise in the broader market. The announcement came after Singaporean trading hours.
The taxi operator said the deal would not impact its earnings in the current financial year.
($1 = 1.3528 Singapore dollars)
(Reporting By Rushil Dutta in Bengaluru; additional reporting by Aradhana Aravindan in Singapore; Editing by Christian Schmollinger and Sai Sachin Ravikumar)