On July 13, Yandex ( YNDX ), the Russian internet company, revealed it would combine with Uber ( UBER ) its Taxi business into the entity NewCo. As a result of the transaction, a new company will be established, with an estimated post-money valuation of $3.725 billion. It is stated Yandex will own 59.3% of the NewCo, while 36.6% will be owned by Uber.
The reaction of the market was more than positive: The stock price of Yandex soared from about $27 on July 12 to more than $31 the next day.
The main aim of the deal is to increase the efficiency of operations and cut costs. Thus, it is claimed by Yandex the merger with Uber will increase vehicle utilization, enhance network effect and lead to faster pick-up times.
Moreover, both sides will have better capabilities in R&D, as Yandex and Uber have “high-quality technical expertise” in the markets they operate in. The addressable market is huge As for the market for the taxi business, the new company will cover […]