Yandex Buys Out Uber From Joint Ventures In $1 Bn Deal

Russian internet company Yandex will pay $1bn to buy out Uber
from joint ventures in food and grocery deliveries, logistics and
autonomous driving.

The all-cash deal gives Yandex full control of Yandex.Eats,
rapid grocery delivery service Yandex.Lavka, and logistics business
Yandex.Delivery, as well as its separately held autonomous vehicle
division, the company said on Tuesday.

The sale indicates Yandex, which is Russia’s answer to Google in
search, is strengthening its focus on food and grocery deliveries
after rapid growth during coronavirus lockdowns. Yandex is also
quickly growing its online shopping and entertainment streaming
offerings.

Yandex, which had nearly $3bn on hand in cash and deposits at
the end of the second quarter of 2021, is one of a number of
Russian companies vying to set up China-style “ecosystems.”

The idea is to leverage tech giants’ reams of user and payment
data to offer users an array of different products within
“superapps”. Yandex and Russia’s two largest ecommerce companies,
Wildberries and Ozon, all bought small banks this year that they
plan to use as platforms for expansion into financial services.

State-run Sberbank, Russia’s largest lender, meanwhile, has also
invested heavily with Yandex’s biggest competitor Mail.ru in a
joint venture including rival taxi and food apps Citymobil and
Delivery Club, though the partnership has been on the rocks since
last year after disagreements over its direction.

Revenues at Yandex.Eats grew 93 per cent year on year in the
past quarter to Rbs8.1bn ($111m), though its losses tripled in that
same period to Rbs3bn.

The unit as a whole, led by one of the world’s few profitable
ride-hailing apps, had earnings adjusted for interest, tax,
depreciation and amortisation of Rbs1.5bn.

The deal also gives Yandex an additional 4.5 per cent stake in
MLU, the joint venture it set up when it merged its taxi business
with Uber in a 2018 deal valued at $3.8bn.

The Russian company will own 68 per cent of MLU, with an
additional 3 per cent set aside for its employees.

Under the deal, Yandex will also have a two-year call option to
buy Uber’s remaining 29 per cent stake in MLU for at least $1.8bn,
rising to as much as $2bn by the end of the period. Yandex also
extended its rights to the Uber brand in Russia and a number of
other countries until 2030.

The deal, which has already been approved by Yandex and Uber’s
boards, is expected to close by year-end.

Russian internet company Yandex will pay $1bn to buy out Uber
from joint ventures in food and grocery deliveries, logistics and
autonomous driving.

The all-cash deal gives Yandex full control of Yandex.Eats,
rapid grocery delivery service Yandex.Lavka, and logistics business
Yandex.Delivery, as well as its separately held autonomous vehicle
division, the company said on Tuesday.

The sale indicates Yandex, which is Russia’s answer to Google in
search, is strengthening its focus on food and grocery deliveries
after rapid growth during coronavirus lockdowns. Yandex is also
quickly growing its online shopping and entertainment streaming
offerings.

Yandex, which had nearly $3bn on hand in cash and deposits at
the end of the second quarter of 2021, is one of a number of
Russian companies vying to set up China-style “ecosystems.”

The idea is to leverage tech giants’ reams of user and payment
data to offer users an array of different products within
“superapps”. Yandex and Russia’s two largest ecommerce companies,
Wildberries and Ozon, all bought small banks this year that they
plan to use as platforms for expansion into financial services.

State-run Sberbank, Russia’s largest lender, meanwhile, has also
invested heavily with Yandex’s biggest competitor Mail.ru in a
joint venture including rival taxi and food apps Citymobil and
Delivery Club, though the partnership has been on the rocks since
last year after disagreements over its direction.

Revenues at Yandex.Eats grew 93 per cent year on year in the
past quarter to Rbs8.1bn ($111m), though its losses tripled in that
same period to Rbs3bn.

The unit as a whole, led by one of the world’s few profitable
ride-hailing apps, had earnings adjusted for interest, tax,
depreciation and amortisation of Rbs1.5bn.

The deal also gives Yandex an additional 4.5 per cent stake in
MLU, the joint venture it set up when it merged its taxi business
with Uber in a 2018 deal valued at $3.8bn.

The Russian company will own 68 per cent of MLU, with an
additional 3 per cent set aside for its employees.

Under the deal, Yandex will also have a two-year call option to
buy Uber’s remaining 29 per cent stake in MLU for at least $1.8bn,
rising to as much as $2bn by the end of the period. Yandex also
extended its rights to the Uber brand in Russia and a number of
other countries until 2030.

The deal, which has already been approved by Yandex and Uber’s
boards, is expected to close by year-end.