Hyundai and Kia Motors’ $300 million investment plan in ride-hailing juggernaut Ola has finally received a green signal from the Competition Commission of India (CCI).
The antitrust watchdog has approved the acquisition of shares in Ola’s parent entity, ANI Technologies & Ola Electric by Hyundai Motor and its affiliate Kia Motors subjected to compliance of modifications.
With the collaboration, most of the new investment will be infused into ANI Technologies. Furthermore, Hyundai and Kia will take a minority stake in Ola Electric. This investment round may also witness participation from Microsoft and Korean funds.
This deal has conclusively materialized after CCI raised a question mark on the nature of the deal.
CCI was concerned about the competitive impact of car companies investing in cab-hailing apps as it might create a monopolistic situation for one carmaker in the market. It had also asked Ola’s parent, ANI Technologies, to define the company’s competitive landscape.
However, the company had failed to provide the necessary documentation over the competition front, and its application was rendered invalid earlier.
Finally, these automotive majors came up with a plan to invest $250 million in Ola while $50 million was reserved for Ola Electric Mobility, which has now been approved.
Ola had revealed that the investments by Hyundai and Kia would help it to develop fleet and mobility solutions, electric vehicles and infrastructure.
Importantly, this is not the first such a strategic investment by car maker Hyundai. In November 2018, Hyundai had invested $275 million in Southeast Asian ride-hailing company Grab.
The carmaker had also poured in $14.3 million round in Indian car rental platform Revv last year. Besides, it has over $1 billion investment plan for the Sriperumbudur facility near Chennai to manufacture electric cars.