Uber cedes Rus­sia to Yan­dex with $3.7 bil­lion merger deal

The Hamilton Spectator - - BUSINESS - ERIC NEW­COMER

Uber is hand­ing over the keys to its busi­ness in Rus­sia.

The San Fran­cisco-based com­pany and Yan­dex are merg­ing their ride-hail­ing busi­nesses in Rus­sia. Uber will in­vest $225 mil­lion and take a 36.6 per cent stake in a new, yet-to-be named ven­ture that will be val­ued at $3.73 bil­lion, the com­pa­nies said in a state­ment Thurs­day.

The deal with Yan­dex is Uber’s sec­ond re­treat from a ma­jor mar­ket. Last year, Uber left China in ex­change for a 17.5 per cent stake in ri­val Didi Chux­ing, after los­ing more than $2 bil­lion bat­tling its com­peti­tor.

While Uber re­mains the dom­i­nant ride-hail­ing op­er­a­tor in the U.S., it has been on the de­fen­sive, be­set by scan­dals that led to Travis Kalan­ick’s ouster as chief ex­ec­u­tive of­fi­cer. The agree­ment with Yan­dex is part of Uber’s re­newed ef­fort to im­prove rev­enue, nar­row losses and re­solve its le­gal is­sues.

“This deal is a tes­ta­ment to our ex­cep­tional growth in the re­gion and helps Uber con­tinue to build a sus­tain­able global busi­ness,” Pierre-Dim­itri Gore-Coty, Uber’s chief for Europe, Mid­dle East and Africa, said in the state­ment.

Ti­gran Khu­dav­erdyan, head of Yan­dex.Taxi in Rus­sia, will be­come CEO of the com­bined en­ter­prise, Uber and Yan­dex said. To­gether, their busi­nesses han­dle 35 mil­lion rides a month, and will also op­er­ate in Kaza­khstan, Azer­bai­jan, Ar­me­nia, Be­larus and Ge­or­gia. The deal is ex­pected to close in the last three months of 2017.

Uber’s exit from Rus­sia could be a pre­cur­sor to more deals in other big, fiercely com­pet­i­tive ride-hail­ing mar­kets. In­vestors have raised ques­tions as re­cently as this month about Uber’s con­tin­ued losses in In­dia and South­east Asia.

They have asked pri­vately whether the com­pany would be bet­ter served by cut­ting deals with mar­ket lead­ers Ola and Grab, two peo­ple fa­mil­iar with the mat­ter said.

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