Taxi firm ComfortDelGro just announced that it has entered into a sale and purchase agreement with Mieten B.V., a subsidiary of Uber, to acquire a 51% stake in its wholly-owned subsidiary Lion City Holdings, which owns car rental company Lion City Rental Pte Ltd.
Lion City Rental is a private hire vehicle fleet owner with about 14,000 vehicles, many of which are rented to Uber drivers.
The aggregate cash consideration for the above acquisition is estimated at S$295 million.
The announcement also suggested that Lion City Rentals “will be able to benefit from ComfortDelGro’s worldclass fleet management and operations, which will be in the interest of drivers and consumers alike”.
It will also create a path for ComfortDelGro’s taxi drivers to receive ride requests on the Uber driver app, thereby increasing their potential earnings while providing users of the Uber app an opportunity to directly book a ComfortDelGro taxi.
The two companies are finalising additional collaboration opportunities.
The announcement also claims that the acquisition will be financed by internal funds, and “is not expected to have any material impact on the net tangible assets per share and earnings per share of the ComfortDelGro Group for the current financial year”.
It also adds that “None of the directors or controlling shareholders of ComfortDelGro have an interest, direct or indirect, in the above transaction.”
Watch this space for updates.