Uber Secures Deal for a $10 Billion Softbank Investment
Ride-hailing group Uber Technologies Inc. confirmed on Monday that it has secured a multi-billion dollar deal with Japan’s SoftBank Group Corp., allowing the telecom company to buy a portion of the ride-sharing startup’s stake.
A spokesman for Uber stated that they have reached an agreement with a consortium led by the Softbank and American private equity firm Dragoneer Investment Group on a potential investment.
Softbank, along with Dragoneer will be able to invest between $1 billion and $1.5 billion in new cash into Uber and acquire as much as 17 percent of its outstanding shares on the private market. Once completed, it would mark as the latest in a series of overseas investments by Softbank.
Moreover, with Uber having an estimated value of $68 billion, the deal represents to about $10 billion in new investment for the transport provider. The Tokyo-based telecom group’s approximately $1 billion investment of fresh funding is expected to have the same estimate.
An initial public offering is expected to take place before the end of 2019.
What the Softbank Deal Means for Uber
The California-based tech company said that the agreement will help them boost their investments in technology as well as further broaden their reach at home and overseas, while strengthening their corporate governance.
The company also believed that it is strong vote of confidence in its long-term potential.
In addition, it could pave the way for one of the most valuable venture-backed business in the world to sell its stock to the public.
The Softbank deal could give Uber another fresh start as well, following its bumpy and controversy-filled situation in the past two years.
Sources familiar with the matter has said that Benchmark will completely drop its lawsuit against Uber’s former chief executive Travis Kalanick upon completion of Softbank’s investment.
The board of the ride-hailing app has already approved a slate of governance reforms that are subjected upon completion of the agreement.
The deal has also been signed on Sunday, though the tender offer would probably take weeks to finish.
Uber plans on publishing newspaper ads informing investors about the stake acquisition, while Softbank will suggest a price at which it will purchase a share.
If you want to learn new things and learn strategies about the market, BWorldpedia is the site you should visit! We provide profound and useful insights about the market and across a plethora of topics related to it.