Uber to merge Russian business with Yandex

By Technology FOXBusiness

In this Monday, Sept. 12, 2016, file photo, a self-driving Uber sits ready to take journalists for a ride during a media preview in Pittsburgh. Uber CEO Travis Kalanick will take a leave of absence for an unspecified period and let his leadership ... team run the troubled ride-hailing company while he’s gone. Kalanick told employees about his decision Tuesday, June 13, 2017, in a memo. (AP Photo/Gene J. Puskar, File)

Uber said Thursday it will merge its ride-hailing business in Russia with Yandex, the top search engine in the country.

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Yandex plans to combine Uber and its own service, Yandex Taxi, in Russia, Azerbaijan, Armenia, Belarus and Kazakhstan. The Russian search engine will hold a 59% stake in the new company, valued at $3.7 billion. Uber will have 37% ownership. Employees will own the rest.

Under terms of the agreement, Uber will invest $225 million, and Yandex will spend $100 million.

Yandex Taxi CEO Tigran Khudaverdyan will serve as CEO of the combined ride-hailing service, which predicts bookings of 35 million rides per month across 127 cities.

The deal is expected to close later this year.

“This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business,” Pierre-Dimitri Gore-Coty, head of Uber’s business in Europe, the Middle East and Africa, said in an email sent to employees.

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Uber’s decision to merge its Russian business with Yandex follows the sale of its Chinese operations to Didi Chuxing in 2016.

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Uber has faced controversy on multiple fronts this year. The Silicon Valley firm conducted two investigations into allegations of harassment and fired more than 20 employees. Uber also continues to fight a battle in court with Waymo, the self-driving car developer created by Alphabet’s (GOOGL) Google, over claims of stolen trade secrets.

Those troubles contributed to the resignation of Travis Kalanick, who left his post as CEO last month.

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