Competition watchdog starts probe into Grab-Uber deal

MANILA, Philippines — The Philippines’ antitrust body announced on Tuesday it was probing Uber Technologies, Inc.’s decision to sell its Southeast Asian business to regional rival Grab, amid concerns that the deal is anticompetitive.

In a resolution, the Philippine Competition Commission ordered its mergers and acquisitions (M&A) office to conduct a “motu proprio” review focusing on the local units of Grab and Uber.

The PCC said a preliminary assessment of the transaction indicates that there are “reasonable grounds” that Grab’s acquisition of Uber’s operations “may likely lessen, prevent or restrict competition substantially.”

The initial examination of the deal also found that the combined business of Uber and Grab will result in a “substantial increase in concentration of an already highly concentrated market,” which can “adversely affect” the riding public.

Uber said Grab will buy the California-based company's ride-sharing and food delivery business in Southeast Asia, the industry's biggest consolidation in the region.

 Under the deal, Uber, which invested $700 million in Southeast Asia, will get a 27.5-percent stake in the combined company and Uber CEO Khosrowshahi will join Grab's board.

According to the PCC, Grab and Uber have not yet notified the commission about the transaction, adding that the two ride-sharing companies have made “representations” that the deal is not covered by the PCC’s M&A review trigger.

If one of the parties to merger and acquisition deals above P2 billion has P5 billion worth of value of assets, the antitrust authority must be informed about the transaction.

Last week, the Land Transportation Franchising and Regulatory Board said the Singapore-based Grab will not have a monopoly, saying three other transport network companies are seeking to enter the Philippines’ ride-sharing market.

Aside from the PCC, Malaysia has also put Grab on antitrust watch as Uber exits the region.