Last Updated Jul 13, 2017 9:19 AM EDT
MOSCOW — Uber has agreed to merge its ride-hailing business in Russia with Yandex (YNDX), the Russian search-engine leader that also runs a popular taxi-booking app.
For Uber, the deal means it's ceding control of the market in the country. It's the second exit from a big market after Uber sold its operations in China last year to local rival Didi Chuxing.
Yandex said in a statement on Thursday that Uber and Yandex Taxi would combine into a new company in Russia as well as in Azerbaijan, Armenia, Belarus and Kazakhstan. Yandex will own 59 percent, Uber roughly 37 percent and employees the rest. The CEO of Yandex Taxi, Tigran Khudaverdyan, will become the chief executive of the new combined company.
Uber will invest $225 million in the new company and Yandex $100 million, putting its value at over $3.7 billion. The companies said together they deliver over 35 million rides a month, with $130 million in gross bookings in June. Yandex is the bigger company, with roughly the twice the business Uber currently has in the region.
Shares in Yandex jumped 15 percent on the Moscow stock exchange on news of the deal.
The company, Russia's equivalent of Google, is one of the country's most successful internet enterprises, accounting for some 65 percent of all searches and operating popular maps and public transit apps. Yandex also offers free email, a browser like Chrome, Web analytics and an app store. It also offers English versions of all its services.
Once the deal is closed toward the end of this year, consumers will be able to use both Yandex and Uber apps to hail rides, while for drivers, the apps will be integrated.