Uber Technologies has agreed to sell its Southeast Asian business to bigger regional rival Grab, marking the US company's second retreat from an Asian market. 

The industry's first big consolidation in Southeast Asia, home to about 640 million people, puts pressure on Indonesia's Go-Jek, which is backed by Google and China's Tencent Holdings Ltd. 

A shake-up in Asia's fiercely competitive ride-hailing industry became likely earlier this year when Japan-based SoftBank Group's Vision Fund made a multi-billion dollar investment in Uber. 

Uber will take a 27.5% stake in Singapore-based Grab and Uber CEO Dara Khosrowshahi will join Grab's board. Grab was last valued at an estimated $6 billion. 

"It will help us double down on our plans for growth as weinvest heavily in our products and technology," Khosrowshahi said in a statement. 

For Grab, the deal will help its meal-delivery service, which will now merge with Uber Eats, compete with Go-Jek, according to a person close to Grab. 

Go-Jek is a dominant player in Indonesia, the region's biggest economy, and has rapidly expanded beyond ride hailing to digital payments, food delivery, on-demand cleaning and massage. 

Ride-hailing companies throughout Asia have relied heavily on discounts and promotions, driving down profit margins and increasing pressure for consolidation. 

Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion last year and is facing fierce competition as well as a regulatory crackdown in Europe. 

Uber invested $700m in its Southeast Asia business, less than the $2 billion it burned through in China before ceding its operations there to Didi.