Alibaba (NYSE:BABA) is reportedly poised to make a $3 billion investment in Asian ridesharing company Grab, with a portion of that figure buying part of the stake owned by Uber Technologies (NYSE:UBER).
Bloomberg reported early Monday that people familiar with the negotiations say the deal would give the Chinese e-commerce giant access to Grab's millions of customers, delivery fleet, digital wallet, and its financial services business.
Grab, based in Singapore, is Southeast Asia's largest provider of ride-hailing services; deliveries of food, grocery, and packages; scooter rentals, and cashless payments. It operates in Singapore, Japan, Cambodia, Vietnam, and four other countries in the region. It had a 95% share of the ridesharing market in 2017.
Alibaba acquired a controlling interest in Singapore-based e-commerce company Lazada in 2016, but has been losing share to Tencent-backed Shopee. Analysts suggest Alibaba could use Grab's services to grab back more of the market.
Uber acquired a 27.5% stake in Grab in 2018 when Uber sold its business to its Southeast Asian counterpart in a bid to focus on its core markets. As part of the deal, Grab has to go public by 2023 or it will pay Uber $2 billion.
Japan's SoftBank Group (OTC:SFTB.Y), which is a major Uber shareholder as well as a big investor in most of Southeast Asia's ride-hailing companies, has been pushing Uber to divest its stake in Grab, along with other ridesharing operations, including China's Didi Chuxing and Russia's Yandex.
SoftBank has a $3 billion stake in Grab and an $11.8 billion position in Didi Chuxing.
By making the sizable investment in Grab, Alibaba may be looking to turn around Lazada, which has been beset by turmoil and this summer appointed its third CEO in three years.