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Will Ola and Uber merge in India? SoftBank board member thinks it will be good for business

It looks like the end of the road for Uber, the mobile taxi hailing service in India after a Softbank board member, who is about to join the US-based company’s board, talked of the possible merger between Ola and Uber in the country with SoftBank as the common investor, Financial Times reported.

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It looks like the end of the road for Uber, the mobile taxi hailing service in India after a Softbank board member, who is about to join the US-based company’s board, talked of the possible merger between Ola and Uber in the country with SoftBank as the common investor, Financial Times reported.

However, an Uber India spokesperson told Business Standard that the talks of a merger were baseless speculation. . “Our business in India is stronger than ever and we are 100% committed to serving our riders and driver partners in India," he said.

 Earlier, Uber closed a deal with SoftBank, commissioning the sale of a significant portion of its sale to the latter, in a bid to implement modifications in management and go public in two years.

A SoftBank Group-led team of investors has made an offer to buy app-based cab aggregator Uber's shares. The deal if happens, would value the company at about a 30 per cent discount to its last private valuation of nearly USD 70 billion.

According to TechCrunch.com, the proposed price for Uber's shares is USD 32.96 per share which roughly amounts to USD 50 billion.

If both the parties involved accepted the deal, then this transaction would be qualified as the largest secondary transaction in history.

SoftBank, who owns a portion of Ola, India's app-based transport provider, plans to purchase the Uber shares along with other investors. Reports suggest that the Japanese conglomerate will gain two Uber board seats as part of the investment.

The agreement comes in the wake of a board meeting, in which directors voted to move forward with an investment from SoftBank. As part of the deal, Uber's board agreed to major governance changes, including curbing the powers vested in former CEO Travis Kalanick, on account of his position on the company's board.

For the unversed, Kalanick was allegedly forced to step down from his position following severe backlash from the company's shareholders. The company had reportedly faced a string of revolts from the shareholders, few of which demanded Kalanick's resignation.

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