Russian internet company Yandex NV said on Monday its ride-sharing and food delivery joint venture with Uber had agreed to buy intellectual property and local call centers from Vezet group as it plans further expansion in the country.
Yandex and Uber Technologies Inc combined their taxi businesses across Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan in 2017 into a joint venture called MLU B.V..
Yandex.Taxi, the largest online taxi service in Russia, is one part of that joint venture. Yandex is also considering a possible IPO of the operator sometime in the future.
Vezet group operates in 123 Russian cities under the Vezet, Taxi Saturn, Fasten and Red Taxi brands. Yandex declined to provide additional information about the deal or how it may relate to the Yandex.Taxi IPO plans.
Yandex said current Vezet shareholders will receive new shares in MLU, representing up to 3.6% of the issued share capital of the company, together with up to $71.5 million in cash.
Yandex will own 56.2% of MLU after the deal and Uber 35%, while about 5.3% will be held by employees under the MLU equity incentive plan.
Under the deal, MLU plans to invest about 8 billion roubles ($127.2 million) in the Russian regions over the next three years, Yandex said in a statement.
"If the deal takes place, I think it will be positive for Yandex, because the company is strengthening its position in the taxi market and increasing the market share," Vladimir Bespalov from VTB Capital said.
Still, it is too early to say how the deal may impact a possible IPO, he added.
Russia's Mail.ru Group, which gave a loan to Vezet last summer and has a right to veto the deal, said it had not yet agreed to Yandex.Taxi acquiring Vezet assets.
"Consent has not been given as of now, therefore we consider the announcement premature," the company said. Vezet said the deal didn't violate the terms of the loan.
"We intend to strictly comply with all our agreements with Mail.ru Group," Vezet's press service said.
It added that Vezet's management will stay in place and business continue as usual
"The deal refers to assets in Russia. We also have business in Czech Republic and Kazakhstan," Vezet said.