Russian internet and ride-hailing giant Yandex has acquired Uber’s stake in its Self-Driving Group (SDG), as well as Uber’s indirect stake in Yandex.Eats, Yandex.Lavka and Yandex.Delivery. The total cost of the deal was $1 billion, giving the Russian company 100% ownership of all four companies.
Yandex SDG is a standalone technology company spun off from MLU BV, the ridesharing and food delivery joint venture that Yandex formed with Uber in 2018 by merging Yandex.Taxi and Uber’s Russian operations. At the time, Uber held a 36.6% stake in the new company. Last year, when SDG was spun off into a separate company, Uber ended up with an 18.2% stake in the company, which was just acquired by Yandex. Yandex also purchased 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 JV, which Morgan Stanley valued at around $7.7 billion. Yandex says self-driving technology is “highly synergistic with the Yandex ecosystem, which includes ride-sharing, e-commerce and food tech companies.” It makes sense that the company wants to control all this potential growth. Uber, which this year posted a loss of $509 million before EBITDA in the second quarter, may seek to make a lucrative exit and refocus its priorities closer to home.
“This acquisition will allow Yandex to further increase its strategic management capability and flexibility in self-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 broader restructuring of joint ventures MLU BV and Yandex SDG, according to Uber’s SEC filing on Monday. They will take place in two stages. Stage 1, which is expected to close by the end of the third quarter of this year, will give Yandex a 4.5% stake in the new, restructured MLU, which will focus on mobility businesses such as carpooling and car sharing. This gives Yandex a total stake of 71% in the joint venture, of which 2.8% is reserved for an employee 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 close 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 businesses.
Yandex will also receive a two-year U.S. call option to acquire Uber’s remaining stake in MLU at a more or less fixed price of $1.8 billion, depending on agreed-upon increases over the option period. . This 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 obtain 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 at the market close.