Yandex shares soared after the deal with Uber

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

Transaction Details

On July 13, a post appeared on Yandex’s blog about the unification of the company’s taxi service with Uber. Yandex.Taxi CEO Tigran Khudaverdyan said that a new company would emerge from the merger. She will work in 127 cities of Russia, Belarus, Kazakhstan, Georgia, Armenia and Azerbaijan.
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In June, Yandex and Uber made a total of 35 million visits in these regions. Their total value amounted to 7.9 billion rubles. This allows a new player to take 5-6% of the market for legal transportation by taxi. The total volume of this segment in 2016 amounted to 502 billion rubles.

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

It should be noted that Yandex.Taxi in Russia works 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 is looking for an investor.

As for Uber, the company does not disclose financial data for Russia, but in general, in 2016 its revenue was $ 6.5 billion, and the net loss was $ 2.8 billion. Before that, Uber was also unprofitable.



Image: joiseyshowaa , CC BY-SA 2.0

The Yandex.Taxi deal is not the first such experience for Uber. A year earlier, the company's Chinese division was united by 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 division. In 1.5 years of work in the country, it lost more than $ 2 billion.

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

The merger is scheduled to close in the fourth quarter of 2017. Prior to this, the agreement must be approved by the FAS. The antitrust service fears that a new market player will create a threat of competition. However, no petition has yet been received for filing the business of companies in the FAS. Be that as it may, the deal has already had an impact on the companies themselves, and on the market as a whole. In particular, the stock price of Yandex broke a historical record.

Takeoff shares Yandex

After the announcement of the merger with Uber, the stock price of Yandex crawled up . In the course of trading on the NASDAQ Stock Exchange, it grew by 16%, reaching $ 31.70. Thus, in just one day, the company's market value in the international market increased by $ 1.36 billion, amounting to $ 10.73 billion.

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

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

Moreover, this is a record figure for Yandex. The price of the company's shares did not rise above 2000 rubles. since they started trading on the Moscow Stock Exchange in June 2014.

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