Uber and Yandex agree merger in Russian Federation and central Asia

Uber merges its eastern European arm with Russian rival Yandex

The new company, valued at 3.7 billion United States dollars (£2.8 billion), will operate in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia and will be 59% owned by Yandex, 37% by Uber and 4% by staff.

Gore-Coty said Uber's 36.6 percent stake was worth $1.4 billion, based on an agreed valuation of $3.725 billion for the combined company. Employees will own 4.1 percent of the company on a fully diluted basis. Uber invested United States dollars 225 million as opposed to Yandex investment of USD 100m.

Chief Executive Tigran Khudaverdyan will become the CEO of the combined business and Yandex will consolidate the new company's results in its financial statements.

Emil Michael, Uber's former SVP of Business who left the company last month, was also involved in the deal.

Gore-Coty called the deal "a testament to our exceptional growth in the region", and he said that "all full time Uber employees in the countries involved will be part of the new company", which suggests that no one will be laid off as part of the new venture.

Uber's decision to merge its Russian business with Yandex follows the sale of its Chinese operations to Didi Chuxing in 2016.

As Uber continues to work through a huge amount of internal management turmoil, the company is also consolidating and rationalising more of its global business. The U.S. firm in return got a 17.5% stake in Didi, which at that time was valued at $35 billion.

Uber is getting a little bit of help in Russian Federation and five other countries.

The share move for Yandex, known as the "Google of Russia" for its dominance of the region's web search, maps and mobile navigation markets, signals that roughly half of the company's market capitalisation lies in investor hopes for its taxi unit.

More than 35 million rides were performed in June between the two operations, collecting more than $130m in gross bookings.

Narrowing its losses continues to be the focus for Uber, given its current focus on profitability and a path to an initial public offering, which major shareholders have become concerned with after the ousting of the company's CEO and co-founder Travis Kalanick.

Yandex said the agreement won't change anything for the users, everything will be available on the two apps as before.

Is ride-sharing giant Uber giving up on its China dream? In all, this new company will operate in 127 cities.

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