According to reports, Ride hailing giant Uber is set to join forces with Russian business and rival Yandex (NASDAQ:YNDX), after the US ride-hailing company spent hefty amount to make a strong foot hold in Russia and other countries in the region.
Reports said that following the close of deal, Yandex, will own about 59% of the combined company, valued at $3.7 billion.
This agreement mean end of rivalry from Uber, which in 2014 started operation in Russia. Their rivalry had fuelled a price war.
Following the report, Yandez stock surged 16% on Thursday.
Meanwhile Yandex’s cheif Tigran Khudaverdyan, is set to become a boss of the new firm, said the merger will boost rides for drivers and cut wait times for passengers.
“This combination greatly enhances Yandex’s ability to offer better quality service to our riders and drivers, to quickly expand our services to new regions, and to build a sustainable business,” he said in statement.
Yandex (YNDX), which is also called Russian Google started in 1997 launched its taxi business in 2011. It is about twice the size of Uber’s.
In addition Yandex (YNDX)will reportedly put in $100 million to the new firm, which will function in 127 cities in Russia, Azerbaijan, Armenia, Belarus, Georgia and Kazakhstan.
However the San Francisco-based giant Uber, will invest $225 million and have a approximately 37% share in the combined firm, wanted to cast the deal as a way to make its finances sustainable and build on its growth. Uber has been under immense pressure from investors to curtail losses and have faced a string of scandals that led to the exit of its long-time chief executive Travis Kalanick.