Vietnam’s trade ministry said on Wednesday it is considering launching a formal investigation into the takeover of Uber Technologies’ Southeast Asia business by rival Grab after an initial probe showed the deal would violate antitrust law.
The ministry had said last month the transaction might be blocked if Uber and Grab’s combined market share in Vietnam is over 50 percent, as per the nation’s law. Reuters reports.
“Preliminary investigation results showed the economic concentration between Grab and Uber in the Vietnam market has a combined market share of over 50 percent,” the ministry said in an statement on its website.
It said after working with the firms, associations and related government authorities, it has found the deal showed “signs of violations on economic concentration”. The ministry did not say by when it will decide whether to launch a formal probe or not.
Uber [UBER.UL] and Grab announced a deal in March under which Uber will take a 27.5 percent stake in Grab in exchange for its Southeast Asian business. The U.S. company had previously sold operations in China and Russia to local rivals.
Vietnam’s move expands scrutiny on the deal, which is already being examined for antitrust issues by Singapore, Malaysia and the Philippines.
It is unclear how the deal will be impacted if Vietnam or any of the other countries ultimately conclude the deal hurts competition.
But while rising regulatory scrutiny could complicate the takeover, lawyers and analysts said there is little the authorities can do to stop Uber from simply exiting the region.
Uber and Grab did not immediately respond to Reuters requests for comments.
Reporting by Mai Nguyen; Additional reporting by James Pearson; Editing by Muralikumar Anantharaman