Page 162 - RusRPTSept21

Yandex to buy Uber’s stakes in JV. Yandex announced it signed binding agreement with Uber to acquire number of its stakes in JVs for $1.0bn cash.
The deal covers:
o Uber’s 33.5% indirect stakes in foodtech (Eats, Lavka) and logistics services, currently held via MLU BV. Yandex will thus own 100% in the businesses
o Part of Uber’s stake in MLU BV (4.5%), which should now focus only on mobility businesses (ride-hailing, car-sharing). Uber will remain with 29% MLU BV, Yandex will hold 68% (including minor stake of MLU BV management); 3% reserved for MLU BV’s employee motivation program
o Uber’s 18.2% stake in Yandex Self-Driving Group. Yandex will own 100%
Yandex also got a call-option to buy out Uber’s remaining 29% in MLU BV. The option can be exercised any time over the two years (i.e., until September 2023 including). The agreed-upon deal price is $1.8-2.0bn – will increase over exercise period from lower end to upper end of the range
o Yandex will retain the rights to the Uber brand in Russia in select other countries until August 2030, if it exercises the option
The deal received all needed approvals, according to Yandex. Exercise of call option, if happens, may require approval of Yandex Class A shareholders
The transaction (two-staged) should be fully done by the end of the year.
The deal was broadly expected, appealing valuation for Yandex. Judging by the terms of the call option, Yandex’s ride-hailing and car-sharing are valued at $6.2-6.9bn for 100% – on our estimates, implies a mere 0.7-0.85x EV/Gross bookings 2021 for the ride-hailing business vs the 1.2x we believe is fair. As for the deal itself, on BCSe, for $1bn Yandex acquires stakes worth in total $1.2-1.7bn.
Yandex had $2.9bn cash and deposits at end-2Q21 (without MLU BV), which should well cover the $1bn deal. It might though need some extra funding if
162 RUSSIA Country Report September 2021 www.intellinews.com