The Federal Antimonopoly Service of the Russian Federation has approved the agreement between Yandex and Uber to combine their ride-sharing businesses in Russia. The Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus has also approved the transaction in Belarus. The decision of the antimonopoly service of Kazakhstan is still pending.
After the closing of the transaction, consumers will be able to use both Yandex.Taxi and Uber apps, while the driver-side apps will be integrated, leading to shorter passenger wait times, increased driver utilization rates, and higher service reliability.
Per the terms of the agreement, announced on July 13, 2017, the parties will contribute their ride-sharing businesses in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus, and Georgia to a new holding company.
Uber will invest $225 million and Yandex will invest $100 million in cash in the new company at closing, valuing it at $3.725 billion on a post-money basis. After these investments, and subject to certain adjustments at closing, the new company will be owned approximately 59.3% by Yandex, 36.6% by Uber, and 4.1% by employees of the company, on a fully diluted basis. Uber will also contribute its UberEATS business in the region to the new company.
To ensure seamless service for riders and drivers, the parties intend to close the transaction after the Christmas and New Year’s holidays, in January 2018.