Uber-Ola Merger Underway! How Will This Help Uber?

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Uber CEO Dara Khosrowshahi in his latest press address reinstated that he is committed to investing more in India, Uber’s third largest market. But Uber’s major shareholder, Softbank has other plans for the world’s most valuable startup.

Despite Uber CEO’s interest to compete, and grow 10x times in India, Softbank, the lead investor in both Uber and Ola, is brokering the deal. As per the media reports that emerged lately, senior officials from both the companies have apparently confirmed the same and stated that it would take at least 2-3 months for the deal to be closed. Both the entities are eyeing on equal market share, further adding to the delay in closing the deal.

The merger is likely to benefit Uber more than anyone else. But how is this going to help Uber?

Uber has recently sold its South East Asian business to its rival Grab. This is a third of the kind of this deal after it’s exit in China and Russia.

With reports emerging that Uber is heading towards an IPO (Initial Public Offering), speculations about its merger with Ola, not only increases its valuation but also its market value. Uber is seeing this as a key strategy to make it big on the IPO day.

Post the merger, Uber can focus on solely on its key markets; the US and Europe. This merger is likely to hint at a ‘monopoly’ for the merged entity, meaning profits can be achieved at will for the conglomerate in the absence of any significant competition.

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