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Brief: Uber board finally agrees to terms of $10b deal with SoftBank

Brief: Uber board finally agrees to terms of $10b deal with SoftBank

Brief: Uber board finally agrees to terms of $10b deal with SoftBank
November 13
01:36 2017
Masayoshi Son, Softbank

Illustration by Tech in Asia, from photo by 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. “We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment,” an Uber spokesman confirmed.
  • The Japanese giant will lead an investment of US$1 billion in fresh stock at Uber’s current valuation of US$68 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.

Editing by Malavika Velayanikal

(And yes, we’re serious about ethics and transparency. More information here.)

About Sumit

A lover of startups and tech, food and travel, cricket and books. Senior Editor with TIA. Mail me at sumit@techinasia.com or tweet me @chakraberty

source : techinasia

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