Yandex Acquires Uber's Stake in Self-Driving Group & Delivery Services

Yandex Acquires Uber's Stake in Self-Driving Group and Delivery Services

Yandex, a leading Russian internet and ride-hailing company, has completed the acquisition of Uber’s ownership stake in its Self-Driving Group (SDG). This deal also encompasses Uber’s indirect holdings in Yandex.Eats, Yandex.Lavka, and Yandex.Delivery.

Deal Details and Total Cost

The transaction was valued at $1 billion, resulting in Yandex gaining full, 100% control over all four businesses. This move signifies a major consolidation of assets for the Russian technology firm.

Origins of Yandex SDG

Yandex SDG originated as a spin-off from MLU B.V., a joint venture established in 2018. This venture was formed through the merger of Yandex.Taxi and Uber’s Russian operations. Initially, Uber held a 36.6% stake in the newly formed company.

Following the spin-out of SDG as a separate entity last year, Uber’s ownership was reduced to 18.2%. This stake has now been purchased by Yandex.

Expansion of Yandex's Portfolio

In addition to SDG, Yandex also acquired Uber’s collective 33.5% interest in Yandex’s food delivery, last-mile logistics, and rapid convenience store delivery services.

Previous Considerations and Strategic Alignment

Reportedly, in 2019, both Yandex and Uber explored the possibility of an initial public offering (IPO) for their joint venture. Estimates from Morgan Stanley valued the venture at approximately $7.7 billion.

Yandex emphasizes that autonomous driving technology is strongly aligned with its broader ecosystem. This ecosystem includes ride-hailing, e-commerce, and food-tech businesses, making complete control strategically advantageous.

Financial Implications for Both Companies

Uber, having reported a Q2 loss of $509 million before EBITDA, may be seeking a profitable exit. This would allow them to concentrate resources on core priorities within their domestic market.

A Yandex spokesperson communicated to TechCrunch that the acquisition will enhance the company’s strategic management capabilities and flexibility in the realm of self-driving technology.

Restructuring of Joint Ventures

The acquisitions are part of a broader restructuring of the MLU B.V. and Yandex SDG joint ventures, as detailed in Uber’s recent SEC filing.

Two-Stage Acquisition Process

The process will unfold in two stages. The first stage, anticipated to conclude by the end of Q3, will grant Yandex a 4.5% interest in the restructured MLU. This entity will concentrate on mobility services, such as ride-hailing and car-sharing.

This will elevate Yandex’s total ownership in the joint venture to 71%, with 2.8% allocated to an employee equity incentive program. Uber’s 18.2% stake in SDG is also slated for sale during this initial phase.

The second stage, expected by year-end, involves the separation of Yandex.Eats, Yandex.Lavka, and Yandex.Delivery from MLU, followed by the acquisition of Uber’s interests in these businesses.

Future Option for Further Acquisition

Yandex will also secure a two-year American call option to acquire the remainder of Uber’s interest in MLU. The price is largely fixed at $1.8 billion, with potential increases based on the option period. This figure could rise to $2 billion if the option is exercised in 2023.

Continued Brand Usage

Yandex will retain the exclusive right to utilize the Uber brand in Russia and select other countries until August 2030, contingent upon exercising the acquisition option.