Russia's Yandex to buy out Uber from joint ventures for $1bn

The two companies jointly own self-driving vehicle and food delivery businesses

Yandex, Russia's biggest internet company, has said it plans to buy Uber's shares in their joint self-driving vehicle and food-delivery businesses and increase its stake in their joint mobility-focused unit in a deal valued at $1 billion.

Yandex will buy Uber's 33.5 per cent indirect interest in Yandex.Eats, Yandex.Lavka and Yandex.Delivery, as well as its 18.2 per cent stake in the Yandex Self-Driving Group to full own the four businesses, the Russian technology company said on Tuesday.

The deal will also give Yandex an additional 4.5 per cent interest in the mobility-focused joint venture MLU, raising its stake to 71 per cent. It will also receive a two-year call option to acquire Uber’s remaining 29 per cent stake in MLU for up to $2bn.

The newly restructured MLU will continue to focus on mobility businesses, including ride-hailing and car-sharing services, Yandex said.

"The consolidation of these businesses puts us in a great position to further increase strategic management flexibility, while creating new substantial growth potential for our businesses and cross-platform consumer benefits over the years to come, allowing us to unlock new sources of value for our shareholders,” said Tigran Khudaverdyan, deputy chief executive of Yandex.

Yandex, a top search and ride-hailing service provider in Russia, will also extend its licence for the exclusive right to use the Uber brand in Russia and certain other countries until August 2030, assuming the exercise of the option, it said.

Yandex's acquisition of 4.5 per cent of MLU and 18.2 per cent of the Yandex Self-Driving Group is expected to close by the end of the third quarter of this year, the company said.

The demerger of Yandex.Eats, Yandex.Lavka and Yandex.Delivery from MLU and subsequent acquisition of Uber’s interest in these businesses is expected to be completed by the end of 2021.

The deal has been approved by the boards of both Yandex and Uber and is not subject to antitrust or other regulatory approvals.

Yandex had been looking to buy out Uber for more than a year as the Covid-19 pandemic spurred demand for delivery and food services in the Russian market.

Uber merged its operations in Russia and neighbouring countries with Yandex in February 2018, in a deal that valued the unit at $3.8bn. Since then, the joint venture expanded into other businesses such as food delivery and drones.

Yandex.Eats is a food and grocery delivery service found in more than 170 cities in Russia and across the Commonwealth of Independent States. It offers 30-minute to 60-minute deliveries from over 35,000 restaurants and more than 2,900 shops.

Yandex.Lavka is a local convenience shop delivery business that offers 15-minute deliveries from more than 360 shops in Russia and Israel.

The Yandex Self-Driving Group has been developing proprietary self-driving technology since 2017. As of Tuesday, it had 170 cars in its self-driving fleet.

Since late 2019, the company has also been developing its own robot, named the Yandex.Rover, for the delivery of small and medium packages.

Yandex.Rovers are already delivering orders to customers in Russia and the US, where the company recently announced a partnership with Grubhub to provide food delivery services to college campuses across the US.

Updated: August 31st 2021, 1:03 PM