July 15, 2017 at 12:15

Yandex shares soared after a deal with Uber



    Service Yandex.Taxi announced the merger with Uber. The joint venture that the companies will create will operate in several CIS countries. As a result of Yandex's statement, the value of its shares rose sharply both in Russia and in the foreign market.

    Deal details


    On July 13, a blog post appeared on Yandex that merged the company’s taxi service with Uber. Yandex.Taxi CEO Tigran Khudaverdyan said a new company will appear as a result of the merger. She will work in 127 cities of Russia, Belarus, Kazakhstan, Georgia, Armenia and Azerbaijan.

    In June, Yandex and Uber made a total of 35 million trips in these regions. Their total value amounted to 7.9 billion rubles. This allows the new player to occupy 5-6% of the legal taxi market. The total volume of this segment in 2016 amounted to 502 billion rubles.

    Yandex and Uber invested $ 100 million and $ 225 million respectively in creating a new player in the market. The cost of the combined company is estimated at $ 3.725 billion. At the same time, Yandex will own 59.3% of the association, and Uber will own 36.6%. Another 4.1% will go to the employees of the new company.

    It is worth noting that Yandex.Taxi in Russia operates at a loss on EBITDA, although it appeared on the local market in 2011. Experts predicted that the company would become profitable by 2021. In April, it was reported that Yandex.Taxi was looking for an investor.

    As for Uber, the company does not disclose financial data for Russia, but in 2016, its total revenue amounted to $ 6.5 billion and a net loss of $ 2.8 billion. Prior to this, Uber was also unprofitable.



    Image: joiseyshowaa ,CC BY-SA 2.0

    Dealing with Yandex.Taxi is not the first such experience for Uber. A year earlier, the Chinese division of the company was united by the local leader Didi Chuxing. Then Uber received 17.5% of the new company, the total value of which was estimated at $ 35 billion. Uber decided to get rid of the Chinese unit, and lost more than $ 2 billion in 1.5 years of work in the country.

    The merger of Yandex.Taxi and Uber was a surprise. The companies did not announce negotiations, and the business media only discussed the possibility of Yandex buying Maxim and InDriver taxi services.

    The merger is scheduled to close in the fourth quarter of 2017. Prior to this, the agreement must be approved by the FAS. Antitrust Service fearsthat a new market player will create a threat to competition. However, applications for combining the business of the companies in the FAS have not yet been received. Be that as it may, the deal has already affected both the companies themselves and the market as a whole. In particular, the price of Yandex shares broke a historical record.

    Yandex stock take-off


    After the announcement of the merger with Uber, the price of Yandex shares crawled up . During the trading on the NASDAQ stock exchange, it grew by 16%, amounting to $ 31.70. Thus, in just a day, the company's market value in the international market grew by $ 1.36 billion, amounting to $ 10.73 billion.

    In the Russian market, the news of the merger of the two players also caused a stir. The deal became known on July 13 at 13.00, and already at 13.40 the value of Yandex securities on the Moscow Exchange rose by 17%, amounting to 1915 rubles.

    By 14.47 Moscow time, trading had to be switched to discrete auction mode , since the price increase exceeded 20%. The maximum value of Yandex share on July 13 was 2039.5 rubles, which is 24.97% higher than the closing price of previous trading.

    Moreover, this is a record for Yandex. The company's share price did not rise above 2000 rubles. from the moment they started trading on the Moscow Exchange in June 2014.

    In this material of ours, we talked in detail about how to buy Yandex shares on foreign exchange platforms and the Moscow Exchange. To open a brokerage account for this, you can remotely through the "State Services" (more about this in our article ).


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