Uber announced Thursday (July 13) that it is teaming up with Yandex to create a new company that combines its Rides and EATS business in Russia.
In a blog post announcing the news, the ridesharing company said the Russian merger will also include business in Azerbaijan, Belarus and Kazakhstan, as well as in Armenia and Georgia, where it currently doesn’t operate. Uber called the merger with the Russian carsharing firm an exciting opportunity in a unique situation and said the operations in other countries will not be affected by it.
“The new company’s goal will be to serve the needs of riders, drivers and cities as we develop a fast-growing, sustainable ridesharing, food delivery and logistics business in the region. Combining Yandex’s local expertise in search, maps and navigation with our leading global experience in ridesharing will enable us to build the best local services and provide a credible alternative to car ownership across the region,” said Uber in the blog post. “For the foreseeable future, the Uber and Yandex brands and rider apps will continue to operate, while the driver apps will be integrated after the transaction closes. The transaction is subject to regulatory approvals and other conditions and is expected to close in Q4 of this year.”
Carsharing company Uber went on to say that combining its business with Russia’a Yandex will give it a “very significant stake” in a new company, which will initially serve more than 35 million trips each month and operate in 127 cities in six countries across the region. Uber will also have three of the seven seats on the new company’s board.
Uber is making a $225 million cash investment in the new company for a 36.6 percent ownership stake, which is said be worth almost $1.4 billion.
“This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business,” Uber said.