As part of the transaction, Uber will take a stake of 27.5% in the Southeast Asian company, Grab said in a statement.

Expectations of consolidation in Asia’s fiercely competitive ride-hailing industry were stoked after Japan’s SoftBank Group Corp made a multi-billion dollar investment in Uber.

SoftBank is also one of the main investors in several other big ride-hailing firms including Grab, China’s Didi Chuxing, and India’s Ola.

Ride-hailing companies throughout Asia have relied heavily on discounts and promotions, driving down profit margins.

Uber, which is preparing for a potential initial public offering in 2019, lost US$4.5 billion (RM17.5 billion) last year and is facing fierce competition at home and in Asia, as well as a regulatory crackdown in Europe.

“It will help us double down on our plans for growth as we invest heavily in our products and technology,” Khosrowshahi said in a statement.

Grab said it will take over Uber’s operations and assets in eight countries in the region, and will expand its food delivery services.