Ola Denies Acquisition Talks With Uber; Seeks To Take Legal Action Against DNA

When DNA carried a news report of Ola considering an acquisition offer by Commutech giant Uber, it had sent shockwaves amongst the audience. 

The homegrown Bengaluru based Ola is the market leader in commutech India, with a presence in over 150 cities and over 50,000 cabs under its fleet. Uber, the global commutech giant is locked in an intense battle over street dominance with Ola in India and the two have been matching feature for a feature and sparring off the streets, to win the battle.

Recently Uber had accused Ola of trying to sabotage its business by creating fake bookings on Uber and cancelling them to cause the latter loss of revenue and customer dissatisfaction.

So, the reports of a potential acquisition of Ola by its biggest rival Uber, came as shocking and unlikely. “Uber may drive away with Ola”, the article title read. However, DNA insisted that it was tipped by “unnamed sources” and the article went on to strengthen its stand by mentioning that Softbank, biggest stakeholder in Ola, will have 26% stake post the Ola-Uber deal.

Below is an excerpt from the article.

Looks like warring taxi aggregators Uber and Ola may shake hands and close a deal soon. A source, who did not want to be named, told dna that Uber is close to acquiring a controlling stake in rival Ola.

He claimed that except for Japanese investor SoftBank, the rest of the shareholders in the Bengaluru-based start-up, including promoters Bhavish Aggarwal and Ankit Bhati, would exit from it.

The source said that Aggarwal’s stake of around 17% has been valued at $680 million and the enterprise value (EV) of the cab-hailing company has been estimated at $4billion.

However, rubbishing this report and putting any rumours of an Ola-Uber merger to rest, Bhavish Aggarwal, co-founder and CEO, Ola has taken to Twitter and has penned an impassioned blogpost

We would like to state that the article, attributed to an ‘unnamed source’ is completely false, misleading, malicious and planted in the said newspaper with the intent of causing harm to the Ola brand and creating confusion among our stakeholders.

The blogpost further states that Ola would be taking legal action against DNA for carrying a false piece of news, even after repeated denial by Ola about the supposed deal.

We believe we are pulling away and continue to gain marketshare over Uber in India. With just one category like Ola Micro alone on its path to becoming larger than Uber, we can only see the momentum continuing to build in the same direction. We also hear this from employees who are leaving Uber for various jobs including wanting to work with Ola or other companies. We have seen Uber in India reacting to Ola’s growth with moves not seen elsewhere globally – be it front page advertising, dramatic fare cuts and rapid and knee jerk changes in categories – so one can only surmise that they are worried about their market share declining. We are clearly in the winning horse with Ola and have no doubts about its future.”, Avnish Bajaj, Managing Director of Matrix Partners India, one of Ola’s key and early investors, and also one of the board members said.

This is not the first time an Indian unicorn has been reported to be in talks of an acquisition by a global giant. Recently, Flipkart was said to be in talks with Amazon over a similar deal, however the reports were hotly denied by the Flipkart founders.

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