WeWork gets CCI approval to exit Indian co-working market
The Competition Commission of India (CCI) has given its approval to WeWork, a US-based co-working space firm, to sell its entire 27.5% ownership in its Indian division. The sale process will involve WeWork and WeWork India's parent company, Embassy Group, jointly selling around 40% stake in the local co-working subsidiary. This deal will result in WeWork's withdrawal from the Indian market.
WeWork's ownership structure in India to change post-deal
The deal was previously delayed due to the need for regulatory approval from the CCI for such a large fund infusion in a market leader. Post-approval, WeWork's ownership structure in India will undergo changes. Currently, Embassy Group holds a majority stake of 72.5% in WeWork India, with the remaining 27.5% owned by 1 Ariel Way Limited, a UK firm that is a subsidiary of WeWork Global.
Financial performance amid global challenges
Despite facing difficulties in the US, WeWork has enjoyed success in India. The company reported revenues of ₹1,400 crore in FY23, clocked an EBITDA of ₹250 crore, and a profit after tax (PAT) of roughly ₹60 crore. WeWork India maintains an occupancy rate of over 80% across its approximately 90,000 desks in the country.
WeWork India's operations and previous global investment
WeWork India began operations in 2017 and currently manages over eight million square feet of assets across 54 locations. This includes cities like New Delhi, Bengaluru, Noida, Mumbai, Pune, Gurugram, and Hyderabad. In June 2021, WeWork Global invested $100 million in its Indian wing to acquire a 27.5% stake. This investment helped the Indian business navigate financial difficulties during the COVID-19 pandemic, which had severely impacted the office space market.
