The Russian group will pay $1bn to Uber to take full ownership of Yandex.Eats, Yandex.Lavka, Yandex.Delivery and Yandex Self-Driving Group
Yandex main office in Moscow. (Credit: WikiFido/Wikipedia.org)
Russian internet company Yandex has agreed to buy out Uber’s stakes in their foodtech, delivery and self-driving businesses for $1bn in an all-cash deal.
As per the terms of the deal, the Russian firm will acquire Uber’s 33.5% indirect stake in Yandex.Eats, Yandex.Lavka and last-mile logistics solution Yandex.Delivery. This will give full ownership of all the three businesses for Yandex.
The Russian group will get full ownership of Yandex Self-Driving Group (SDG) as well by buying out Uber’s 18.2% stake in the business.
Under the same deal, Yandex will get an additional 4.5% stake in the newly restructured MLU. The restructured firm will be engaged in mobility businesses such as ride-hailing and car-sharing.
In 2018, MLU was incorporated in the Netherlands through the merger of Yandex.Taxi and Uber’s operations in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan.
Yandex.Eats is the food and grocery delivery service operated by MLU. Yandex SDG, on the other hand, is a spin-out of MLU.
Yandex.Lavka is a hyperlocal convenience store delivery service in Russia and Israel.
Following the deal, Yandex and its employees will hold a stake of nearly 71% in the MLU joint venture.
The Russian group has secured a two-year American call option to buy out the remaining 29% held by Uber in the newly restructured MLU at a strike price of $1.8bn. The final price will be subject to agreed increases over the option period, up to nearly $2bn if the option is exercised in September 2023.
Besides, Yandex will get an extension of the existing license for the exclusive right to use the Uber brand in Russia and some other countries till August 2030, in case of the option being exercised.
Yandex deputy CEO Tigran Khudaverdyan said: “Since we started our partnership with Uber in 2018, we’ve been able to create and rapidly develop a number of successful businesses — all of them are highly synergetic to our e-commerce initiative and to the entire Yandex ecosystem.
“The consolidation of these businesses puts us in a great position to further increase strategic management flexibility, while creating new substantial growth potential for our businesses and cross-platform consumer benefits over the years to come, allowing us to unlock new sources of value for our shareholders.”
The deal is not contingent on antitrust or other regulatory approvals. However, the approval of Yandex’s Class A shareholders could be needed for the buyout of Uber’s remaining stake in MLU as per the call option.