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Yandex.Taxi and Uber plan to apply to antimonopoly watchdog on merger deal

July 14, 9:42 UTC+3 MOSCOW

The companies will submit an application in the coming days

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MOSCOW, July 14. /TASS/. Yandex.Taxi and Uber plan to apply to the Federal Antimonopoly Service (FAS) with a request on the companies’ business merger in the coming days, Irina Gushchina, Uber Communications Director in Russia and the CIS, said in an interview with Rossiya 24 TV channel.

"The deal itself is subject to agreement with the regulating authorities, including FAS. We have announced that we had signed an agreement, announced that we will create a company. The next step is the negotiation of the deal, and we intend to begin this process literally in the coming days," she said.

Head of FAS Igor Artemyev said earlier that combining Yandex.Taxi and Uber taxi businesses might present a threat restricting competition in the market. "We have only heard about it today, and I have learned about it three hours ago. We have an idea - we have three main aggregators and if two of them are going to merge, then this is, of course, a threat to the market. A threat to restrict competition, undoubtedly, is present here, "Artemyev said.

Head of FAS noted that the antimonopoly authority must first carry out market analysis - "to see the number of trips, to see prices," and to obtain a request from the companies.

FAS press service told TASS earlier Yandex and Uber did not yet submit application to the Russian Federal Antimonopoly Service (FAS) for combining online taxi businesses in Russia and other countries.

"FAS did not receive an application from Yandex and Uber on combining businesses in Russia and other countries. The companies’ shares on the market will be determined in the course of comprehensive consideration of the application upon its admission," Head of FAS Department for Regulation of Communications and Information Technologies Elena Zaeva said.

Yandex.Taxi and Uber announced earlier that the companies agreed to combine their businesses in Russia, Azerbaijan, Armenia, Belarus, Georgia and Kazakhstan.

According to the report from Yandex, both Yandex.Taxi and Uber app will operate as before, driver apps, on the other hand, will be transitioned to a unified platform. "This combined driver platform will significantly increase the number of available cars, reduce passenger wait time, and boost vehicle utilization. Drivers will be able to perform more trips per hour while passengers will continue to enjoy affordable prices," the company said.

The new company will also operate the UberEATS service in the region.

Uber will invest $225 mln and Yandex will invest $100 mln into the combined company, valuing it at $3.725 bln on a post-money basis. "On a pro forma basis, Yandex will own 59.3% of the combined company, Uber will own 36.6%, and employees will own 4.1%," Yandex said.

Yandex does not rule out the initial public offering (IPO) for the new Yandex.Taxi and Uber and company, Yandex press service told TASS. "We do not rule it out," the press service said.

The transaction is still subject to regulatory approvals and is scheduled to close in the Q4 2017.

The two teams will be integrated together and the current CEO of Yandex.Taxi Tigran Khudaverdyan will serve as the CEO.

According to analysts, the size of the official Russian taxi sector reaches approximately $8.4 bln (2016, VTB Capital). "That means that the combined company’s share of the taxi sector would have been only about 5-6%," Yandex said.

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