Russian internet and ride-hailing giant Yandex has acquired Uber’s stake in its Autonomous Driving Group (SDG), as well as Uber’s indirect stake in Yandex.Eats, Yandex.Lavka and Yandex.Delivery. The total cost of the transaction was $ 1 billion, giving the Russian company 100% ownership over all four businesses.
Yandex SDG is a standalone tech spin-off of MLU BV, the Yandex rideshare and food delivery joint venture formed with Uber in 2018 by merging Yandex.Taxi and Uber’s Russian operations. At the time, Uber held 36.6% of the capital of the new company. Last year, when SDG was split into a separate company, Uber ended up with an 18.2% stake in the company, which was just bought out by Yandex. Yandex also bought Uber’s collective 33.5% stake in Yandex’s food delivery service, last mile logistics service and 15-minute convenience store delivery service.
In 2019, Yandex and Uber reportedly considered an IPO for their joint venture, which Morgan Stanley estimated at around $ 7.7 billion. Yandex says the autonomous driving technology is “very synergistic with the Yandex ecosystem, which includes rideshare, e-commerce and food technology companies.” It makes sense that the company wants to control all of this potential growth. Uber, which reported a second-quarter loss of $ 509 million ahead of EBITDA this year, may be looking to make a lucrative exit and refocus its priorities closer to home.
“This acquisition will allow Yandex to further increase its strategic management capacity and flexibility in autonomous driving technology,” a Yandex spokesperson told TechCrunch. “This will unlock additional growth potential for Yandex and Yandex SDG, creating new sources of shareholder value.”
The acquisitions are part of a larger restructuring of the MLU BV and Yandex SDG joint ventures, according to Uber’s filing with the SEC on Monday. They will take place in two stages. Stage 1, which is expected to be completed by the end of the third quarter of this year, will give Yandex a 4.5% stake in the newly restructured MLU, which will focus on mobility activities like carpooling and l carsharing. This gives Yandex a total of 71% stake in the joint venture, of which 2.8% is earmarked for an employee equity incentive program. Uber’s total 18.2% stake in SDG is also expected to be sold in the first stage.
Stage 2, which is expected to be completed by the end of this year, includes the spin-off of Yandex.Eats, Yandex.Lavka and Yandex.Delivery from MLU and the subsequent acquisition of Uber’s stake in these companies.
Yandex will also receive a two-year US call option to acquire the remainder of Uber’s stake in MLU at a more or less fixed price of $ 1.8 billion, based on agreed increases over the option period. . That number will increase to $ 2 billion if exercised in 2023. The Russian company will also continue to use the Uber brand exclusively in Russia and other countries until August 2030.
Yandex will also get an extension of the current license for the exclusive right to use the Uber brand in Russia and certain other countries until August 2030, assuming the exercise of the option. Yandex stock was up 5.16% on Tuesday when the market closed.