Uber, Yandex to merge Russia ridehailing business in $3.7bn deal
Uber and Yandex, the “Google of Russia”, have agreed to combine their Russian ride-sharing businesses, with Yandex becoming the leading partner in a deal that extends to five neighbouring markets.
Yandex will own 59%, Uber roughly 37%, and employees the rest. The CEO of Yandex Taxi, Tigran Khudaverdyan, will become the chief executive of the new combined company. Uber will invest $225 million in the new company and Yandex $100 million, putting its value at over $3.7 billion.
Yandex shares rose 15% on the Moscow stock exchange on the news. The company is one of Russia’s most successful Internet enterprises, accounting for some 65% of all searches and operating popular maps and public transit apps.
“With this deal Yandex eliminates an aggressive competitor which, in the long run, will lead to improved monetisation and profitability,” said Sergey Libin, an analyst with Raiffeisen Bank in Moscow.
The deal marks another pullback from Uber’s breakneck global expansion, coming a year after its exit from China.
For months Uber has struggled with legal setbacks, accusations of a sexist work culture and driver protests, resulting in the departure of co-founder and CEO Travis Kalanick under investor pressure.
In a joint statement, Yandex and Uber said they will join forces in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan to create a new company operating in some 127 cities, in a deal expected to close in the fourth quarter.
Yandex.Taxi CEO Tigran Khudaverdyan will become the CEO of the combined business and Yandex will consolidate the new company’s results in its financial statements. Yandex will hold four board seats, while Uber holds three, they said. Uber will contribute its UberEATS food delivery business in the sixcountry region to the new venture. Diversified internet giant Yandex is the dominant player in Web search, maps and mobile navigation in the region.