13 July, 2017
It is Uber's second retreat from a major market after quitting China past year.
As part of the deal, Yandex will invest $100 million and hold a majority stake of 59.3 percent, while Uber will invest $225 million and hold a stake of 36.6 percent. Yandex will hold four board seats, while Uber holds three, they said.
The new company - which will be headed up by Tigran Khudaverdyan, who now serves as the CEO of Yandex.Taxi - will also tap Yandex's existing technologies including maps and navigation.
Uber sold its Chinese business to far larger local rival Didi Chuxing a year ago in return for Uber receiving a 17.5 percent stake in Didi which was then valued at $35 billion.
Uber is scaling back in Russian Federation by spinning off its operations in the country to form a new company majority-owned by local rival Yandex.
Yandex (NASDAQ:YNDX) inks an agreement with Uber (Private:UBER) to combine their ridesharing businesses in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia into a new firm called NewCo. "This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business", says Pierre-Dimitri Gore-Coty, Head of Uber in Europe, the Middle East and Africa. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in Q4 of 2017.
The move, which follows an expensive battle between the two companies since Uber launched in Moscow in 2014, is the latest evidence of a change of direction at Uber, which has been beset by problems in recent months.
Yandex has gross bookings of $1.01 billion on an annualized basis, while Uber had just over half of that, at $566 million, according to Bloomberg. A name for the new company has not yet been announced. Apps from both ride-hailing companies will continue to be offered, while the driver app will become a single platform.
The new company, which has not yet been officially named, "will have the right to use Yandex.Taxi and Uber brands in the region", the companies said.
