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Yandex (YNDX) to Acquire Uber's Interest in Joint Ventures

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·4 min read
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Yandex N.V. YNDX has signed an agreement with Uber Technologies UBER to acquire the latter’s interests in several joint ventures between the companies in exchange for $1 billion cash.

Under the agreement, Yandex will acquire Uber’s 33.5% stake in Yandex.Eats, Yandex.Lavka and Yandex.Delivery, which will provide it with complete ownership of these businesses.

Additionally, Uber will sell its 18.2% interest in Yandex Self-Driving Group (SDG) to Yandex.

Further, Yandex will take over 4.5% interest in MLU, indicating 71% ownership comprising 68.3% ownership of Yandex and management, and the remaining 2.8% reserved for the employee equity incentive program of MLU.

For buying the remaining 29% of Uber’s interest in MLU, Yandex has received a two-year American call option at a strike price of $1.8 billion.

The buyout of 4.5% of MLU and 18.2% of SDG is likely to get completed by third-quarter 2021. Additionally, the acquisition of Yandex.Eats, Yandex.Lavka and Yandex.Delivery is expected to be completed by 2021-end.

Yandex N.V. Price and Consensus

Yandex N.V. Price and Consensus
Yandex N.V. Price and Consensus

Yandex N.V. price-consensus-chart | Yandex N.V. Quote

Growth Opportunities

With the acquisition of Yandex SDG, the company can expand presence in the autonomous delivery robots market, which is growing due to increasing adoption of autonomous delivery robots in various industries including healthcare, hospitality, retail and logistics.

A report by Mordor Intelligence indicates that this market is likely to hit $3.82 million by 2026, witnessing a CAGR of 49.01% between 2021 and 2026.

The buyout will also help Yandex in penetrating the autonomous vehicle market, which, per a report by MarketWatch, is likely to grow at a CAGR of 63.5% between 2020 and 2027.

Further, the recent move will add strength to Yandex’s mobility businesses comprising ride-hailing and car-sharing.

According to a report by Research And Markets, the global ride hailing market is likely to hit $108.15 billion in 2025 from $56.87 billion in 2021, witnessing a CAGR of 17%.

Additionally, a report by Mordor Intelligence reveals that the ride-sharing market is anticipated to hit $209.6 billion by 2026, progressing at a CAGR of 19.2% from 2021 to 2026.

Thus, Yandex is positioning itself well to capitalize on the abovementioned prospects.

Furthermore, with the acquisition of Yandex.Eats, Yandex will be able to expand presence in the booming food delivery services market, which, per a report by Technavio, is expected to grow $215.56 billion between 2020 and 2024, witnessing a CAGR of 12%.

Bottom Line

The recent move bodes well for Yandex’s growing efforts toward strengthening its portfolio of services. The company’s strategic acquisitions and partnerships have been acting as key catalysts in shaping up its growth trajectory.

Apart from the latest move, the company’s acquisition of the call centers and cargo business of Vezet Group for the development of logistics services and enhancement of customer care across Russia remains noteworthy.

In addition, it recently collaborated with Just Eat Takeaway.com’s GRUB Grubhub for quicker and low-cost food deliveries on college campuses in the United States via its autonomous delivery robots. This remains a positive for the company.

However, stiffening competition in the autonomous driving space, food delivery market and other end markets poses a serious challenge to Yandex.

Further, mounting investments across all segments remain a serious threat to its margin expansion.

Zacks Rank & Stocks to Consider

Currently, Yandex has a Zacks Rank #5 (Strong Sell).

A better-ranked stock in the broader technology sector is Advanced Micro Devices AMD, carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Advanced Micro Devices is currently projected at 44.6%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

Yandex N.V. (YNDX) : Free Stock Analysis Report

Just Eat Takeaway.com N.V. Sponsored ADR (GRUB): Free Stock Analysis Report

Uber Technologies, Inc. (UBER) : Free Stock Analysis Report

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