Yandex NV (NASDAQ: YNDX) has announced that it will acquire Uber Technology Inc.’s (NYSE: UBER) stake in its joint delivery, foodtech, and autonomous driving businesses and also increase its interest in its ride-sharing joint venture in a $1 billion deal.
The deal is part of the car-sharing and MLU ride-sharing joint venture restructuring encompassing Yandex. Yandex will own 71% of Yandex.Taxi, while Uber’s stake will shrink from 33.5% to 29%, according to Yandex, which also said it has carried out a $2 billion call option of buying out the remainder should it decide to do so.
Yandex to acquire 33.5% indirect interest owned by Uber in the joint venture
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As per the agreement, Yandex will take the 33.5% indirect interest by Uber on Yandex.Lavka, Yandex.Delivery and Yandex.Eats and the 18.2% interest of Uber in Yandex Self-Driving Group effectively give Yandex 100% interest in all operations.
After reporting solid Q2 results and reviewing its 2021 revenue projection in July, Yandex enhanced its digital commerce investment plan for 2021 from $400-500 million to $650 million. This was a result of the growing interest in online services boosted by the COVID-19 pandemic. This year, the company expects e-commerce GMV to triple.
Yandex spokesperson Asya Panoyan said that the implementation of the restructuring has already been approved by Uber’s, and Yandex’s Boards of Directors will be in two stages. The company anticipates the process to be complete by the end of 2021. Notably, the transaction will be financed using the company’s funds.
The asset consolidation will allow them to “Interact more closely with Yandex.Market and strengthen each other,” according to Panoyan.
Yandex could need extra funding to finalize the deal
At the end of Q2, Yandex had cash and deposits of $2.9 billion, which might not be adequate to fund the deal, according to BCS analyst Maria Sukhanova. Sukhanova said:
“It might though need some extra funding if and when it decides to exercise the option for Uber’s stake in MLU BV.”
Interestingly Yandex is planning to extend its exclusive rights license to utilize the Uber Brand in Russia, including other countries, up to August 2030. Yandex and Uber combined their operations in Russia and surrounding countries three years ago. Last year in June, Yandex indicated that it wanted to have full control of then Yandex.Taxi ride-sharing service and was engaging Uber about increasing its majority interest.
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