September 27, 2018 / 9:01 AM / 3 months ago

Singapore's Grab in talks to sell Thai unit stake to Central Group: sources

BANGKOK (Reuters) - Singapore-based ride-hailing firm Grab is in talks to sell “a decent-sized stake” in its Thai business to Thailand’s largest retailer, Central Group, people with direct knowledge of the matter told Reuters on Thursday.

A Grab motorbike helmet is displayed during Grab's fifth anniversary news conference in Singapore June 6, 2017. REUTERS/Edgar Su

The talks are taking place as Grab faces intensifying competition from Indonesia’s Go-Jek, which has plans for a $500 million investment to enter Thailand and other countries in the region.

If the deal with Central Group goes ahead, it will expand Grab’s existing tie-up with the retailer beyond food delivery to areas such as digital payment and e-commerce, the people said.

“There’s a natural synergy with Central,” said one, citing Grab’s current food delivery service from Central restaurants.

Grab is interested in doing business with JD Central, a $500 million e-commerce joint venture that Central launched earlier this year with China’s e-commerce giant JD.com, said the person, who declined to be identified as the matter was private.

The size of the deal is yet to be determined, though discussions have been ongoing for some time, said the people.

Grab, which counts Uber Technologies, Japan’s SoftBank Group Corp, Toyota Motor, and China’s ride-hailing firm Didi Chuxing among its backers, said it would not comment on “rumors and speculation”. Central did not respond to a request for comment.

“Aligning itself with the Central Group could help Grab get faster approvals in developing its ride-hailing and digital payments businesses,” said Nattabhorn Juengsanguansit, Director at Asia Group Advisors, a government relations advisory.

“The deal represents potential synergies for both sides, for example in lowering transportation costs for Central’s food and e-commerce businesses,” she added.

Central Group, owned by the billionaire Chirathivat family, also manages shopping centers and hotels across Thailand.

The deal could also help Grab navigate required new regulatory standards, said Jay Harriman, senior director at BowerGroupAsia.

Reporting by Chayut Setboonsarng; Editing by Christopher Cushing and Kirsten Donovan

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