Brief: Uber board finally agrees to terms of $10b deal with SoftBank
The news (via Reuters:
- Uber’s warring board members have finally agreed to terms for an investment by SoftBank that could be worth US$10 billion, reports Reuters, citing unnamed sources familiar with the deal expected to be announced soon.
- The Japanese giant will lead an investment of US$1 billion in fresh stock at Uber’s current valuation of US$68.5 billion. It will then set a price to buy existing shares at a lower valuation over the next month. SoftBank can still walk away from the deal if it does not reach a target of owning 14 percent of Uber shares.
- Uber’s board had agreed to a change in governance structure to pave the way for the SoftBank deal over a month ago. But a tussle between co-founder Travis Kalanick and investor Benchmark had put the deal in limbo. Last week, SoftBank’s Masayoshi Son had floated a possible investment in rival Lyft instead.
Why it matters:
- The deal could end the boardroom battle that has bogged down Uber. It will strengthen the position of new CEO Dara Khosrowshahi who had spoken out earlier, criticizing Kalanick’s moves behind his back to control the board.
- This deal would make SoftBank a major investor in Uber as well as its Asian ride-hailing counterparts Didi, Ola, and Grab. The Japanese giant will thus be betting on ride-hailing tech being the winner, whichever company comes out on top in the end.
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