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Russia’s antimonopoly watchdog warns Uber-Yandex.Taxi merger may restrict competition

The Head of the Russian Federal Antimonopoly Service comments on Yandex.Taxi and Uber taxi businesses merger

MOSCOW, July 13. /TASS/. The Uber-Yandex taxi merger deal could hamper competition in the market, Igor Artemyev Head of the Federal Antimonopoly Service (FAS) of Russia told reporters.

"We only heard about it today, and I 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 hazard to the market. A threat to restrict competition, undoubtedly, is present here, "Artemyev said.

The FAS chief noted that the antimonopoly authority must first carry out a market analysis - "to see the number of trips, to see prices," and to petition the companies.

"That is, if Uber and Yandex.Taxi want to merge now, this is a wonderful wish, but the state has the law "On Protection of Competition", so this deal should be considered through the prism of this law," Artemyev noted. "They are probably preparing to file a petition... We are not particularly worried - if we need to approve the deal, then we will approve it, the second option is to deny, the third one - to approve with instructions," he said.

FAS press service told TASS earlier Yandex and Uber did not yet submit application to the Russian Federal Antimonopoly Service.

"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.